Optimism among investors rose, with Ashmore’s head of research Jan Dehn going so far as to say the 3% figure was “conservative”.
Dehn said: “The EM growth story is not new. EM growth bottomed out in 2015, when EM countries ‘only’ grew twice as fast as developed economies.
“In the preceding five years the EM growth premium had declined as financial conditions tightened due to a giant rotation of global capital out of EM into QE-sponsored financial markets in Europe and the US. However, EM countries survived with surprisingly few casualties.
He added: “Rather than going under most EM countries emerged from the financial drought stronger due to dramatically improved competitiveness on the back of lower currencies and reforms. This enabled EM countries to begin to reaccelerate in 2016 due to strong net exports.”
Broad macroeconomic data is improving for emerging market countries while they also seem to buck the western trend for populism with emerging market politics pulling away from the movement, according to Columbia Threadneedle’s Mark Burgess.
