China’s economy is slowing down, Brazil’s President Dilma Rousseff may be impeached, Russia’s truckers are threatening march on Moscow, South Africa’s economy is disappointing while India’s thriving.
To sum up, the BRICS and the emerging markets (EM)’ economy as a whole has increasingly become disparate and therefore more difficult to forecast. Considering this is gaining growing importance in world finance, central bankers Janet Yellen (Fed) and Mario Draghi (ECB) have given more attention to EM’s impact on their respective economies in recent statements.
“Among emerging market economies, recent data support the view that the slowdown in the Chinese economy (…) will likely continue to be modest and gradual,” said Yellen who took an optimistic stance citing easing monetary and fiscal policies, pickup in advanced economies’ demand and stabilization in commodity prices as main reasons for boosting the growth forecasts of EM economies.
Along with two other facts, “the economic recovery in the euro area continues to be dampened by subdued growth prospects in emerging markets and moderate global trade,” said Draghi who stressed that the weakening of EM economies has been one of the main changes in the external factors which calibrated the quantitative easing (QE) launched by the ECB in January 2015.