Buttonwood: Out of fashion

by / Tuesday, 20 October 2015 / Published in Economy

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Investors have become pessimistic about emerging markets

LIKE hemlines and hairstyles, emerging markets swing in and out of fashion. A burst of enthusiasm in the late 1980s was followed by the financial crises of the late 1990s. In the first decade of the 21st century, they were all the rage again, and the term BRIC (for Brazil, Russia, India and China) was coined. When the economies of the rich world swooned in 2008, emerging markets seemed to be the best hope for the future.
But the past few years have seen their popularity wane once more (see chart). The change in mood is understandable. The IMF has forecast that 2015 will be the fifth successive year in which economic growth in emerging markets has slowed. Two of the BRICs—Brazil and Russia—are in recession. Many are uncertain whether the Chinese authorities can engineer a soft landing for their economy, as it slows from the furious growth of previous decades. Emerging markets’ advantage over rich countries, in …
Source: The Economy