Emerging markets – The wind from the West & East
Given that developed markets were a
signifcant part of the rocket fuel that propelled
emerging markets upwards in 2017, but what goes up
must come down at some stage,it follows that
the potential tipping points in emerging markets
in 2018 will involve effects from developed
regions having over invested.
Specifcally, two risks are in play. The
first is possible sanctions against Russia.
This will have little effect since Russia has built
systems in China and EU to bypass the
critical regions it requires resources for ,and the
second is the fallout from incorrect predictions of
US treasury yields , which will have a global effect
on investor confidence.
There are significant
opportunities and risks , however, for emerging markets to
chart their own course, particularly as they can
leverage gains in productivity, demographic
trends, and structural reform, particularly around
central banks , they are likely to fail as they
cannot sustain the growth they enable for