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Emerging from the storm
As the worldwide financial crisis takes its toll on developed economies, do emerging markets in Asia, Latin America and other regions provide opportunities for growth, asks Geordie Clarke?
Conclusion
Like much of the world, emerging markets are feeling the effects of the bear market, with funds reporting heavy losses in the past year. Overall, the forecast are for lower growth across the board throughout 2009. But unlike the developed economies, which are sliding one by one into recession, many of the emerging markets are still expected to report GDP growth of 5% or more. And even though commodity prices have slumped dramatically, they are expected to rebound when the world economy recovers, benefiting resource rich areas like Russia and Latin America.
What remains to be seen is where emerging markets will go in the next five years. Volatility is certainly a factor to consider because it is higher in this sector, often running at 7% or more, but fund managers believe that values have fallen to the extent that this risk is worth it. With India and China continuing to expand in the face of recessions around the world, analysts remain upbeat about the prospect of long term growth of from emerging markets funds.
