EM growth outpacing developed economies

EM growth outpacing developed economies

Emerging market economies are likely to grow at almost twice the pace of developed economies in 2016, according to AllianceBernstein.

Global economic growth will be relatively modest throughout 2016, with AllianceBerstein's (AB's) outlook of 3.6 per cent growth for developing economies outpacing developed market growth (1.9 per cent).

In its Global Economic Outlook for April 2016, AB maintained its growth estimate for the remainder of the year.

"Although the global growth backdrop is uneven, there have been some encouraging developments that could signal acceleration in the coming quarters," said the report.

First, while there has been a "broad rebound" in spot commodity prices over the past three months, it is too early to say with any confidence if it signals a faster turn in global economic activity, said AB.

"Second, weak growth and a strong currency have hurt the US manufacturing sector. But the negative effect on production and orders seems to be fading," said the report.

"The March survey of purchasing managers showed a decisive turn in domestic and export orders, pushing the combined total to its highest reading since late 2014.

"Third, Chinese data still support our expectation that the economy will muddle through, with gross domestic product (GDP) growth averaging about 6.3 per cent.

"While that won’t lift global growth, it does remove downside risk. A positive catalyst would be a rebound in export growth, but none of the key metrics that we follow suggest that’s in the cards."

Finally, AB said that despite improvement in the US labour market and a rebound in wages/inflation, the Federal Reserve has been sounding more dovish lately about hikes to US interest rates.

"The tilt toward a more accommodative stance sapped some of the US dollar’s recent strength, and that in turn bolsters the recent upswing in commodity prices and emerging-market economies," AB said.

Read more:

Russell Investments rolls out low-carbon strategy

OneVue adds international equities SMAs

Millennials demanding responsible investment

Bank inaction on fintech could 'prove fatal'

Super funds down 1.1% in March 

Related Articles


EM growth outpacing developed economies
investordaily image
ID logo
promoted stories


Robert Priestly

JP Morgan chair resigns ASX, Future Fund roles


Robert Harrison

Equity Trustees hires BNP Paribas US CEO


investordaily image

Future Fund restructures, property head departs

Tim Stewart


investordaily image

Super shouldn’t be a lottery

Tim Stewart

investordaily image

Can infrastructure equities cope with rising rates?

James Lydotes

James Swanson

Is this as good as it gets?

James Swanson