Five years on from the “End of a Golden Age”

Five years ago this October, we published a piece arguing that the “golden age” for emerging markets had ended and that they were entering a period of permanently weaker growth. Since then, many of the structural problems that we anticipated have begun to bite and growth has weakened. There’s little that governments can do to restore economies to their previous rates of expansion since these were boosted by a series of one-off factors that can’t be repeated. But at the same time, there are few signs that they are embracing the policy reforms that could help cushion the slowdown.
Neil Shearing Group Chief Economist
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Emerging Markets Economics Update

Disruptions no longer worsening, but Omicron a threat

November’s PMIs offered tentative signs that the worst of the supply disruption may have passed, but the bigger picture is that manufacturers in the emerging world remain stretched. And while it’s still too early to tell, the Omicron variant could exacerbate existing strains. The upshot is that supply constraints are likely to continue to weigh on industry for some time yet.

1 December 2021

Emerging Markets Trade Monitor

The impact of Omicron on EM trade

If the new Omicron variant leads to tighter containment measures across the world, that would probably prop up demand for pandemic-related goods to the benefit of Asian exporters. Meanwhile, oil producers are likely to see external positions deteriorate if the plunge in prices is sustained. But arguably the most clear point for now is that the new variant will lead to renewed slumps in tourism, adding to balance of payments risks in the likes of Tunisia and Sri Lanka.

30 November 2021

Emerging Markets Economics Update

The Omicron variant and the threat to EMs

There’s a lot that we don’t know about the new Omicron variant. But if it proves more virulent, the economic fallout would probably be largest in EMs in parts of Africa and South and South East Asia that have lower vaccination rates, more limited fiscal space and/or larger tourism sectors. The new variant may also temper the pace of tightening cycles in parts of the emerging world. In view of the wider interest, we are also sending this Emerging Markets Economics Update to clients of all our Emerging Markets services.

29 November 2021

More from Neil Shearing

CE Spotlight

The rebirth of inflation?

The debate over inflation has become polarised between those who expect a return to the 1970s and those who believe inflation is still dead. The reality is more nuanced and inflation outcomes are likely to vary between countries. A new era of higher inflation is most likely to emerge in the US and perhaps the UK. But we think inflation will remain extremely low in the euro-zone, Japan and China. In those countries where we anticipate a sustained rise in inflation, the most likely outcome is that it increases to moderately higher rates of 3-4%. But risks are generally skewed to the upside and there is a real possibility that inflation increases to a much higher rate that would, in time, necessitate a more substantial tightening of policy.

30 September 2021

Global Economics Update

A summer catch-up

The data released over the northern hemisphere summer break have suggested that economic recoveries in most countries have started to lose some steam. At the same time, while inflation is generally higher now that at the start of the summer, there are signs that it is nearing a peak in most places. Against this backdrop, while the major central banks have begun to discuss tapering asset purchases, the bigger picture is that policy settings will remain extremely accommodative.

2 September 2021

Global Economics Update

The global implications of a slowdown in China

The slowdown that we anticipate in China over the next 6-12 months is best viewed as a return to normality following a period of above-trend output. While it will be a headwind to growth in some industrial commodity producers, we do not think it will derail recoveries in the world’s major advanced economies.

23 July 2021
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