Group Economics Emerging Markets
Emerging Markets Outlook Different growth paths
Marijke Zewuster T: +31 (0)20 383 05 18 marijke.zewuster@nl.abnamro.com
24 June 2015
Growth in many emerging markets disappoints again in 2015
Since our November 2014 edition, we have lowered our growth forecasts for Latin America and Emerging Europe
Growth in Asia will more or less stabilise overall, with India being the fastest grower
We expect a recovery in Latin America and Eastern Europe in 2016, but downside risks are considerable across the board
Growth disappoints again
in 2015, but after a disappointing first quarter we are now
While regional growth in Asia has remained markedly stable in
forecasting 2.7% growth for 2015. This is in contrast to the
recent years, at an average rate of around 6.4%, trends in
eurozone, which is faring slightly better than expected. We
Eastern Europe and Latin America are declining. In Eastern
expect growth here to improve from 0.9% in 2014 to 1.8% in
Europe, growth fell from a meagre 1.8% in 2013 to 1.3% in
2015 (rather than 1.5% as forecast in November).
2014 and we actually expect a contraction of around 1% this
Overall, world growth is likely to come out just a meagre 3%
year. In Latin America, growth dropped from 2.4% to 1% in the
for the fourth year running in 2015, with emerging market
same period and, with a little luck, will remain just above 0% in
growth expected to fall from 4.6% in 2012 to just below 4% in
2015. The divide among the BRIC countries has continued to
2015, and growth in advanced economies to increase from
widen, with Brazil and Russia likely to see their economies
1.2% to 2.2%. So, although emerging markets still account for
contract this year, while China and India are still showing
the bulk of world growth, advanced economies are gradually
growth rates of around 7%.
making a bigger contribution.
Divide between BRIC countries widens
Slowdown in growth emerging markets
GDP growth, % yoy
GDP growth, % yoy
16
10
12
8
8
6
4
4
0
2 0
-4
-2
-8 07
08
09
Brazil
10
11
China
12 India
13
14
15
16
Russia
07
08
09
10
11
EM
12
13
14
15
16
Developed
Sources: ABN AMRO Group Economics, EIU
Source: ABN AMRO Group Economics
Disappointing growth in Eastern Europe is due mainly to
Emerging Europe: Large differences in growth
Russia and Ukraine. In Latin America, existing structural
Since our November edition, we have lowered our 2015
imbalances are exacerbated by a strong decline in confidence
growth forecast for Eastern Europe from 1.8% to -0.9%. Not
driven by domestic political developments, reinforcing the
surprisingly, the outlook for Russia and Ukraine, in particular,
negative impact of lower commodity prices and rising risk
has been revised downwards. While in November we still
aversion.
expected growth in Russia to stabilise at low levels and Ukraine to show a recovery, we now believe Russia’s
Other factors include falling growth momentum in the US and less strong growth in global trade. In November, we expected US economic growth to strengthen from 2.4% in 2014 to 3.8%
economy will contract by 4% and Ukraine’s by 10% this year.