Rapid-Growth Markets Forecast: Winter 2013

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RGMs driving a resurgence in global growth

Increasing trade among RGMs themselves, together with monetary and fiscal measures implemented by Asian and Latin American policy-makers in 2012, has been key to the current resurgence. Taken together, we predict that RGMs will underpin a recovery in global growth from 3% in 2012 to 4.2% in 2014.

Only in the US are significant upside risks to growth visible.

RGMs are expected to lead a pickup in global momentum

  • With both the Eurozone and Japan ending 2012 in recession, the advanced economies are not expected to contribute to the pickup in global economic momentum in 2013. Only in the US are significant upside risks to growth visible.
  • As expected, China's economy appears to have landed softly. We expect growth to pick up to 8.3% in 2013 and 9.0% in 2014.
  • China's recent slowdown has been mainly cyclical, and due to an earlier tightening of domestic policy and weakness in key export markets such as Europe. However, the new leadership has voiced its commitment to a shift toward more sustainable and balanced growth.
  • We expect other Asian RGMs to see their growth rate accelerate from 6.3% in 2012 to 7.8% in 2014 as China's recovery broadens.

Enabling Latin America to benefit from higher demand for commodities

  • We expect the pace of growth in Latin American RGMs to accelerate from 2.6% in 2012 to 4.8% in 2014, driven by Brazil and Argentina and benefiting from increased demand for commodities from emerging Asia. Mexico is expected to gain from its strong trade links with the US as import demand improves in the latter next year.

Eurozone uncertainty will continue to weigh on activity in emerging Europe

  • Due to their strong trading and financial links with the relatively depressed Eurozone, the European RGMs are expected to lag behind their Latin American and Asian counterparts in 2013.

Slightly lower oil prices will dampen Middle East activity

  • Growth in the three RGMs of the Gulf Cooperation Council (GCC), Saudi Arabia, the United Arab Emirates and Qatar, remains robust, although the pace began to slow in H2 2012.

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