China and India are proving to be the most resilient nations out of the BRICs, despite lagging growth in the last year.
STORY HIGHLIGHTS
- The International Monetary Fund and the World Bank have updated their global economic projections
- The new figures make for ugly reading, with a slowdown still apparent in the global economy
- But there is an interesting caveat in the World Bank's report on the emerging market economies
- Two members of the BRICS are emerging as the globe's economic pillars
Both the International Monetary Fund and the World Bank gave their updated projections on the global economy ahead of this week's G8 Summit in North Ireland. It was not pretty reading.
In a nutshell, according to the World Bank, it looks like this:
Global growth is stable, but slow. It is now forecast to reach 2.2% from last year's 2.3%. The industrialized countries are barely sputtering along. The 34 countries that are members of the OECD will be just above 1% and the developing countries just over 5% this year and a hair over 5.5% through 2015.
But tucked into the World Bank "Global Economic Prospects" report is an interesting caveat; developing country performance would be much lower without the two pillars of emerging markets and the two anchor members of the BRICS: China and India.
Strip them out of the equation, according to the World Bank, and developing countries see their top line number come down to 3.6% this year -- a full 1.5% lower. That spread should be consistent through 2015, according to the forecasts.
Two points were given more than their fair share of market and media coverage last week. The World Bank cut its projections from China quite severely to 7.7%, down more than 0.5%.
The view was circulated that the BRICS have lost their luster; in essence their better days are far behind them.
Andrew Burns, author of the World Bank report, said that investors should adjust their expectations.
No comments:
Post a Comment