Emerging countries: exports and consumption as main drivers
Emerging countries offer a relatively stable outlook for the next quarters, despite fears of rising protectionism among developed countries. Growth has stabilised thanks to consumption and accommodative economic policy in past months. Moreover, momentum has turned positive in the manufacturing sector, and exports have performed better, particularly in Asia.
Growth in China should stabilise around 6.5%, thanks to a strong consumer economy and global investment. After the Xi Jinping-Trump meeting, fears of a ‘cold war’ on trade and currency between the two major economies have reduced. In the meantime, China continues to tighten its monetary policy, aiming to clean up the banking sector, prevent any further bubble in the property market and stabilise capital flows. Among emerging markets, Asia continues to offer the most attractive outlook, thanks to China and India. The economic situation in Brazil and Russia has improved slightly but commodity price volatility and political instability act to slow down the exit from recession. Moreover, the latest geopolitical developments in the Middle East have reduced the probability of seeing any easing of sanctions against Russia.