EM growth stuck in the slow lane

Having shown signs of picking up towards the end of last year, growth across the emerging world seems to have slowed once again in recent months. The latest slowdown has been due to several factors, some of which are likely to be short-lived. In particular, having experienced a weak start to 2014, we expect the US economy to rebound over the coming months. This should give a boost to several EMs, including Mexico as well as parts of Asia. But some of the factors that have contributed to EM weakness in recent months are likely to be longer-lasting. Having accelerated towards the end of 2013, growth in the largest EMs – the BRICs – has slowed once again. The problems in the BRICs are structural in nature and likely to persist for some time. Accordingly, the present growth rate of EM GDP of 4.5% or so looks set to become the new norm.