Emerging markets to drive global growth for years: Schroders
The “baton of global growth” has passed definitively from the developed world to the emerging world, according to Schroders’ global head of emerging market equities Allan Conway.
He said this year emerging markets would account for 100 per cent of global growth (due to low external debt levels and fast growing middle classes), up from a 60 per cent average in the years leading up to the global recession.
“Over the next five, 10, 15, or 20 years, or for the foreseeable future, the emerging markets will be accounting for 70 to 75 per cent for global growth.
“It’s now the case that the emerging world is driving the world economy, and that’ going to be the case for the foreseeable future,” he said.
“Indeed, I think it’s not unfair to say that at the moment what we have got is a choice between the emerging countries and, let’s not call them the developed countries, but the submerging countries.”
Even if there is a prolonged global recession/depression, with negative growth going through into next year, emerging markets would continue to grow, albeit by just by a couple of per cent, he said.
“But it’s extraordinary that we can even talk about positive growth in emerging countries, even in the face of a global recession/depression.
“At any other time in the past 40 or 50 years, had we been talking about a global recession/depression emerging markets would have suffered the most”.
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