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2017 to see firmer and lasting growth in Emerging countries

December 2016

December 14, 2016 | 10:00 | Dubai

As 2016 draws towards a close, Union Bancaire Privée sets out its investment outlook for 2017. Amongst others is their belief in Compelling value remains across many emerging markets.”

Growth in emerging countries should speed back up in 2017 to nearly 5% in aggregate, having dropped as low as 4.5% in 2016. The commodity price rally, and the reforms and stimulus by governments should restore the foundations of growth, with a better balance between sectors which should make that growth more sustainable.

China and India will continue to be emerging countries’ growth engines. China’s growth rate may rise back to 7% thanks to the stimulus measures applied in 2016, and also as a result of the reforms to shift its growth model from being centred on exports and manufacturing to running on consumer and infrastructure spending. India’s economy has regained all its vigour and recent reforms there should also push growth up towards 8%.

Asia should keep up its strong momentum, but the outlook is also improving in other regions. Russia and Brazil will benefit from the recovery of the commodity markets and should ease out of recession in 2017, also helped by stabilising domestic demand.

So for the first time since the financial crisis, economic activity in emerging and developed countries should be more synchronised. The agreements on oil production and the gradual increase in trading within each region should help world trade rebound, after several years of near stagnation.

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