EM recovery dependent on China

The EM world is now growing at its fastest pace in nearly two years. According to our GDP tracker, EM GDP growth in October reached 3.5% y/y, which is the strongest since January 2015. China has been driving the rebound, with our China Activity Proxy suggesting the economy there is now expanding at its fastest pace since early 2014. But outside China, the pace of the recovery has faltered. Although growth in the rest of Asia has been fairly stable, it looks to have dropped back a bit recently. Meanwhile, growth appears to have weakened in Emerging Europe, primarily because of problems in Turkey. Finally, Latin America is continuing to contract, due in large part to the continued recession in Brazil.