Investments  

Warning world 'can't rely on emerging markets' to bail it out

 

Growth in emerging markets will not be enough to bail out the rest of the world as has happened during the global financial crisis, according to the guests on the latest FTAdviser podcast.

Hugh Gimber, market strategist at JP Morgan, said: “Demand from emerging markets will probably help but not to the same extent as in previous years.

"Secondly I think the shape of demand from emerging markets is different today, with many moving to a more services and consumption based model. I would also say that demand wasn’t very strong in the first place.”

James Dowey, who runs the Liontrust Global Equity fund, said: “The surge coming out of the financial crisis was China’s enormous Keynesian fiscal stimulus which for a while powered the world.

"But I think China will be much more cautious this time, not least because they are still living with the hangover of that debt.”

Andrew Ness, manager of the Templeton Emerging Markets Investment trust, said some emerging market economies will have economic problems of their own and so will be constrained in terms of the extent to which they can employ a stimulus to boost demand. 

To listen to the full podcast click on the link above. FTAdviser's podcasts are available on Acast and are available to download on Apple Podcasts and Spotify.

david.thorpe@ft.com