Emerging Asia pulls ahead

Growth in the emerging world has remained stuck at around 4.5% y/y in recent months, but the aggregate number masks a recent divergence in regional performance. Growth has slowed in Latin America and Emerging Europe as weak commodity prices and lacklustre demand from the euro-zone, respectively, have dampened economic activity. Emerging Europe's performance has also been dragged down by Russia, which faces a myriad of challenges such as high inflation, capacity constraints and economic sanctions. In contrast, Emerging Asia has been showing some signs of improvement. China's economy has strengthened on the back of targeted policy support that has helped to offset continued weakness in the property sector. The rest of the region has also recorded stronger activity in recent months.