Emerging markets: Sustainable turnaround in capital inflows?

For several months now emerging markets have been enjoying increased popularity again among portfolio investors.

Emerging markets: Asian companies expected to consolidate their debt

The rampant growth achieved by the emerging markets in the first few years following the global recession of 2009 was accompanied by a rapid increase in debt among private households and the corporate sector alike, particularly in Asia.

Insurance markets in Asia - quality before growth

Despite slowing economic momentum, the insurance market in Asia in the years ahead is likely to grow more strongly than in the past.

Emerging markets - slowdown not beginning of end of catch-up process

In recent years, the forces driving global economic growth have shifted back somewhat in favor of the industrialized nations.

The end of the emerging market boom?

For many years the emerging markets were seen as the epitome of high economic growth and hence as an important driver of the world economy.  In recent months, however, there has been a flood of bad news: disappointing growth rates, mass demonstrations, political unrest and then the surge in capital outflows since late May.

Asian growth set to be more moderate, but above all more balanced

The Asian emerging markets grew by 7.4% in real terms last year. In 2010, a year that was characterized by a strong global rebound from the previous severe recession, economic growth had come in at as much as 9.6%. The more subdued performance seen in 2011 is attributable to weaker global trade growth, which came in at only 5.6% compared with growth bordering on 15% in 2010. There are several reasons behind this development: first of all, the slowdown in world trade momentum has to be seen, at least in part, as a “return to normal”. Second, however, it also reflects the very subdued economic development in the industrialized countries. And last but not least, world trade took a significant knock, at least temporarily, as a result of the natural and reactor catastrophe in Japan in the spring, and the flooding disaster in Thailand in the fall of last year. In both cases, interruptions of international supply chains resulted in severe production losses.

Asian economic outlook – robust, but risks still remain

The massive economic slump seen in the winter of 2008/2009 was followed by what was in part a very strong rebound in the world economy that has persisted to date. Global output rose by 4.1% last year, having tumbled 2.1% in 2009. However, the scale of the recovery varied widely among the individual countries and regions. Growth in the emerging markets was particularly dynamic, above all in Asia where industrial production is now a good 46% up on its 2007 level. For comparison: the industrial countries have still not made up the production losses caused by the crisis, with industrial output currently still almost 10% below its 2007 level.

China in 2011 - characterized by growth and change

China's share of the global economic cake is growing fast. Ten years ago, it accounted for no more than just short of 4% of global output, compared with an impressive 9.5% this year. In the past, it was the US that was looked upon as the engine behind global growth – a role that more and more voices are keen to ascribe to China. This is reason enough to look at the economic prospects in store for China next year. Two issues are likely to be the core of economic policy measures next year: the battle against overheating without compromising growth, and reform of the Chinese growth model.

Brazil: Stability Pays off – Strong Growth, but also Major Challenges Ahead

As recently as ten years ago, hardly anyone would have believed that overall, Brazil would emerge relatively unscathed from a crisis on the scale of the latest global economic and financial problems. In previous periods of crisis, no matter whether caused by external shock or due to home-made problems, the largest economy in Latin America has more than once been on the brink of default. The key factor in this rising ability to cope with crisis is the stability-oriented economic policy of the past decade. The foundations of this policy were laid by Fernando Henrique Cardoso, initially during his term in office as Finance Minister (1992-1994) and subsequently as President (1994-2002).