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The MSCI Emerging Markets index is now at its lowest level in almost four years
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The MSCI Emerging Markets index is now at its lowest level in almost four years. The consensus in late 2011 was about a two-speed recovery: the emerging markets would quickly recover while the developed economies would struggle.
Take a look at what has been happening in some of the largest emerging markets. Growth in China is now nearly half the level it was at before the global financial crisis of 2008. Brazil and Russia are in recession. Turkey has seen only a modest slowdown but economic imbalances are a threat to its stability. Indonesia has done much better than its peers. India is perhaps the only major emerging market where growth will accelerate over the next few years, which is positive even if one treats the new growth numbers with some scepticism.
Global investors are right now wary of all emerging markets, but they will at some point have to differentiate between commodity exporters such as Brazil and commodity importers such as India.
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