EM growth appears to have sunk to a post-crisis low of around 4% y/y in the first quarter of this year, driven in large part by a deepening downturn in the BRICs. China has grabbed most of the headlines over the past few weeks, although we suspect that the slowdown reported in the most recent data has been exaggerated by the timing of this year’s lunar New Year holiday. Elsewhere, the recession in Russia has deepened, caused by a collapse in consumer spending. And in Brazil, a combination of government austerity and a further drop in commodity exports appears to have caused output to contract in the first quarter of this year. Of the major EMs, only India’s economy has shown signs of improvement. Looking ahead, the downturn in the BRICs may bottom out in the second quarter. But any hopes for a vigorous and sustained recovery are likely to be dashed.
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