Many emerging economies are losing momentum, challenging the growth plans of international businesses. Using our ‘Conditions for Growth’ framework we’ve identified 4 economies which could provide businesses with a buffer against a slowdown.
These are economies which have:
So what are the pockets of opportunities in the global economy and why do we think they have the edge in the areas thatmater?
We think Poland is increasingly benefitting from easy and open access to internationalmarkets like the European Union (EU) and Russia. Exports accounted for around 46% of Polish GDP in 2012, almost double the 27% share in 2001.
Australia has the most stable business environment out of all the economies we monitor.We believe this fact, coupled with its geographic location near to a fast growing part of the world and continued demand for natural resources, will mean that businesses consider it as a relatively safe investment hub in the Asia- Pac region .
South Korea’s high levels of research and development expenditure (3.7% of GDP) and a skilled workforce is providing the resources necessary for growth in the technology sector.
Canada is energy secure and uses one of the highest shares of renewable energy in electricity generation of any economy we track. For businesses, this means they are less sensitive to energy price swings in the future.
Continuing our focus on growth areas, we also discuss the economic prospects of the Central and Eastern European economies (CEE) with an interview with our senior economist in Poland.
However, in some emerging economies, the mood is turning sour. Our expectations of 2013 GDP growth in emerging economies are, on average, around 0.7 percentage points lower than 6 months ago. This is driven by long-term structural weaknesses and large current account deficits, which have become an increasing focus of market concern as the prospect of future tapering by the Federal Reserve draws capital back to advanced economies.
Figure 1: Our refreshed pockets of opportunity: Canada, Poland, Australia and South Korea