Chart of the week
After one and a half years of slowdown, growth in emerging countries stabilised in the third quarter. The upturn in growth in Latin America, driven by Brazil, and in emerging European countries, thanks to Russia and Turkey, offset the slowdown in growth in Asian countries, particularly China and India.
Over the last few quarters, growth in emerging countries has been slowed by multiple factors, both global (trade war, slowing global trade and the manufacturing sector) and specific (downturn in non-bank loans and elections in India, monetary tightening in Turkey, etc.).
These factors will probably be less significant than in 2020, or at least not as intense. The partial agreement between China and the US limits the risk of a new escalation in trade tensions, India has taken measures to support growth, monetary policies have eased in many emerging countries, and the election calendar will be relatively thin.
All this offers hope of a continued improvement in growth in emerging countries over the next few quarters.
The opinion expressed above is dated 20 December 2019, and liable to change.
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