Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Emerging economies mirroring the West?
Tue, 28 Jun Pre-Open

Emerging economies have grown at a stupendous rate in the past few years. Although there was a slowdown at the height of the global economic crisis, most of these economies including India and China recovered sufficiently well to start posting much stronger growth rates.

With the developed world still mired in a recession, hopes have been pinned on the emerging economies to rebalance the global economy. And the strong GDP growth that these economies have been exhibiting implies that they will not face the same fate as their developed peers. Or will they?

The Bank for International Settlements (BIS) opines that although emerging countries have been growing faster, there has been a buildup of imbalances, which if not corrected soon, would fuel the same kind of problems that the countries of the West are facing right now. For instance, rapid growth has brought with it the problem of bubbles in certain sectors such as real estate as well as rising indebtedness in the private sector. Not just that, Brazil, China and India, have seen credit grow by an annual average of more than 20% between 2006 and 2010. This is equal to or greater than the rates of growth logged by Ireland and Spain, the beleaguered European economies.

Emerging economies are also battling high inflation which threatens to slow down growth. In India at least, India Inc. is beginning to see some impact on profits on account of rising input costs and interest rates. India is also trying to grapple with trying to bring its fiscal deficit down. Although the government in the Union Budget had a come out with a roadmap for bringing this deficit down, it will well prove to be a tall order. This is because subsidies is one of the main reasons that has caused the deficit to rise and since crude prices have been firm in recent times, oil subsidies could well rise. All of which would only crank up the pressure on the Indian government to reduce debt.

From a long term perspective, there is still tremendous potential for the Indian economy to do well but not unless it addresses some of the important issues of cutting down debt and ramping up overall infrastructure.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Emerging economies mirroring the West?". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Agora Research Private Limited.

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.