Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Home Page / Quick Edit | Emerging markets redux
BackBack

Quick Edit | Emerging markets redux

Quick Edit | Emerging markets redux

Premium

We had asked in these columns earlier this week whether economies that collectively churn out half the world’s output and boast increasing financial strength should continue to be called emerging markets.

The new World Economic Outlook released by the International Monetary Fund (IMF) gives us reason to revisit this question (see Page 4). The multilateral lender notes in the report that financial markets in emerging economies “have been remarkably resilient".

Forget the temporary strain after the collapse of Lehman Brothers in September 2008 and think about it: Did stock markets stop trading, did banks tumble or were there defaults on foreign debts? No. That happened in 1997, but not in 2008.

IMF points to three reasons: lower fiscal deficits, larger foreign exchange reserves and less corporate dependence on foreign borrowings.

If emerging markets as a group have become more resilient to shocks, then shouldn’t financial markets be pricing in this new reality through lower risk premiums?

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 02 Oct 2009, 12:26 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App