Would the slow US recovery impact emerging market growth?
What we have seen is a degree of economic decoupling. Emerging markets are not totally dependent on the developed markets. A 2.5 per cent US growth is good enough. Looking at Europe, there hasn’t been a year after 2000 where it has contributed more than 10 per cent to global GDP growth and, in the last two years, it has contributed nothing. For the world economy, what matters is Germany, not small economies like Greece, Portugal or Spain. Emerging markets such as India have reached a point of economic take-off, a critical mass and momentum that will help it keep going. It is a good thing that the US and Europe are growing at a moderate sub-par rate. If the US was growing at five-six per cent as it does after a deep recession, and Europe was growing at three per cent, commodity prices would go through the roof and that would not be good for emerging markets. These scenarios allow them to grow without energy constraints. Given the current situation, which sectors would be your best bets
