Emerging Markets: Where will they go from here?
Emerging markets: Where will they go from here? After all the gloom of last year’s emerging market zombie apocalypse, this Goldman Sachs podcast offers a rosier outlook for the months ahead (listen, runtime: 18:35). The challenges of 2018 came on the back of four main issues, GS says: Tightening global financial conditions, a rise in oil prices, a slowdown in growth of developed economies, and an increase in protectionism and trade friction. Now, as the US Federal Reserve puts the brakes on rate hikes and oil prices stabilize, emerging markets have enjoyed the best start to a year since 1991.
Data seems to conclusively show a recovery is ahead, even if China and Turkey are being slower to bounce back than other emerging markets. In addition to the helping hand of the Fed and oil market stability, developing economies are now undertaking reforms seen in advanced economies in the 1990s and 2000s. This, according to the podcast, is lending more credibility to EM fiscal policies, creating positive investor sentiment and raising growth prospects for the future.