Commodity producers and China drive EM recovery

EM GDP is currently growing at its fastest pace in 18 months, with the recovery being driven mainly bystronger growth in commodity producers as well as an upturn in China. According to our GDP tracker,EM GDP growth reached 3.2% y/y in August – the fastest pace of expansion since February last year.GDP growth in non-commodity producers has picked up a little since the start of the year, thanksmainly to stronger growth in China. Meanwhile, economic growth in EM commodity producers,helped by a bottoming out of the recessions in Brazil and Russia, has rebounded strongly in recentmonths. Looking ahead, we expect EM GDP growth to accelerate further over the comingmonths. But growth is likely to peak in 2017 at rates far below the averages of the past decade.