Hit like ton of BRICS: 2013 tough year for emerging markets - Page 2 of 3 - Capital Business
Connect with us

Hi, what are you looking for?

The "BRICS" countries - Brazil, Russia, India, China and South Africa - and other emerging markets had for years been the stars of the world economy, helping pull it through the Great Recession/XINHUA-File

Kenya

Hit like ton of BRICS: 2013 tough year for emerging markets

When China sneezes…

Most worrying of all is China.

Its growth rate fell just 0.1 point in 2013, to 7.6 percent. But that is down from 9.3 percent in 2011 and double-digit growth for much of the decade before.

“Investors had previously assumed China would continue to grow at an annualised eight to nine percent. That is impossible longer term,” Weafer said.

Spanish bank BBVA warned that “the possible correction in Chinese growth and that of other emerging economies is a risk factor” for the world economy.

“Many other countries and economies became dependent” on Chinese growth, said UBS in a note on investment prospects for 2014.

“Chinese investment growth fuelled commodity demand and supported many economies as far away as Brazil and Australia,” said the bank, warning: “There is no ‘China after China’.

“In other words, there will be no superpower growing in double-digit GDP terms now that China is slowing.”

Many emerging economies were also hit hard by market instability in 2013. Fear that the US Federal Reserve was about to abruptly end its stimulus measures caused investors to pull out of emerging markets, wreaking havoc on stocks and currencies in several countries.

Advertisement. Scroll to continue reading.

Several major American and European companies suffered big losses because of the resulting exchange-rate fluctuations.

Pages: 1 2 3

Advertisement

More on Capital Business