Shifting gears: Emerging market prospects are on track
Emerging economies grow much faster on average than developed countries, the demographic structure of their population is typically more beneficial, and their growing middle class with increasing disposable income is boosting consumption.
The long-term perspectives are promising, but how about the short to mid-term? And how do investors focus on the right opportunities? We have asked our investment experts to provide us with their different perspectives. The more you consider all the different views, the more likely it is that you can make the right decisions for your investments. See what our experts have to say about investment opportunities.
The term “emerging market” was introduced in 1981 by the World Bank’s International Finance Corporation (IFC), aiming to attract investment capital to those countries that needed it most. Foreign investment in the stock markets of developing countries was minimal at that time and did not yet play a role in supporting growth and modernization. There was a negative perception of these countries – called ‘Third World’ – at the time. The importance of emerging markets in the global economy has since increased significantly, and many investors are aware of their benefits.
There is no single consistent definition of an emerging market. The IMF World Economic Outlook classifies 39 economies as “advanced,” based on such factors as high per-capita income, exports of diversified goods and services, and greater integration into the global financial system. The remaining countries are classified as “emerging market and developing” economies.