The turmoil in Russia and broader weakness in EM financial markets has brought a subdued end to the year. For 2014 as a whole, the latest data point to aggregate GDP growth of less than 5% for the third successive year. And it seems that the “new normal” of sub-5% growth will continue in 2015. Structural factors will remain a drag on growth in the BRIC nations next year, while recent sharp falls in commodity prices – particularly oil prices, which have almost halved since June – will also weigh on those EMs that export natural resources. Of course, lower oil prices, coupled with the recent sell-off of EM currencies against the dollar, will benefit many manufacturing-based EMs, particularly in Emerging Asia and Emerging Europe. But this is unlikely to be enough to drive a significant acceleration in overall EM GDP growth, which we expect to remain stuck at about 4.5% next year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services