Emerging Markets 2018 Economic Outlook (25-January-2018)

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Emerging Markets 2018 Economic Outlook

Emerging Markets have suffered in recentyears due to low commodities prices and slower global demand, but analystsbelieve that this year will be brighter. In fact, the IMF said in its latestWorld Economic Outlook that the higher global growth projection for this yearand next, “stems from improvements in some large emerging market and low incomeeconomies that in 2016 were exceptionally stressed.”
Our economists expect that higher commodityprices, resilient global growth and still accommodative monetary policies willboost economic activity in many of the emerging markets, although this will notbe the case across the board. Let’s take a closer look at what’s expected forsome of these countries in the coming year:



China
The Chinese economy’s slow-but-steadydeceleration will continue in 2018 as policymakers continue to rebalance thecountry’s economic model. Tighter regulation in the property market andstricter environmental regulations will exert downward pressure on growth.FocusEconomics panelists forecast that the economy will grow 6.4% in 2018,which is unchanged from last month’s forecast. In 2019, the economy is expectedto grow 6.2%.


India
Growth is expected to accelerate further asrecent fine-tuning measures on GST compliance, a large recapitalization planfor public banks and easing policy uncertainty all bolster the economy’sperformance. The economy is expected to grow 6.6% in FY 2017, down 0.1percentage points from last month’s estimate. This month’s downward revisionlargely reflects a slightly weaker-than-expected GDP figure in Q2 FY 2017. InFY 2018, panelists forecast growth of 7.4%.




Russia
Higher commodity prices, lower interestrates and low inflation are expected to fuel another year of moderate growth in2018. The upcoming elections do not pose a risk to our forecasts, as economicpolicy will likely not be affected. FocusEconomics Consensus Forecast panelistssee GDP expanding 1.9% in 2018, unchanged from last month’s forecast and onlyslightly above 2017’s projected 1.8% expansion. In 2019, growth is seen broadlystable at 1.8%.



To be continued.........