Growth in certain African regions and the Middle East gained momentum recently while the successful Brics economies slowed down.
The World Economic Forum said that Brazil, Russia, India, China – the Brics nations – along with South Africa had lagged their emerging market peers, while growth in the Middle East, North Africa and sub-Saharan African countries increased.
The Forum’s Global Competitiveness Report warned of a decelerating economic recovery and said the slowdown to a large extent reflected the inability of leaders “to address the many challenges”.
The large emerging markets had particularly lagged their peers in developing Asia, the report said.
The 545-page document argued the global economy was troubled by a slow and weak recovery and warned that recent developments - including the danger of a property bubble in China, a decline in world trade and volatile capital flows in emerging markets - could derail the recovery and have a “lasting impact on the global economy”.
Rising unemployment, the danger of a banking system meltdown, high levels of sovereign debt and low growth were also highlighted as risks.
However, emerging markets as a whole continued to outpace developed markets.
“As in previous years, growth remains unequally distributed. Emerging and developing countries are growing faster than advanced economies, steadily closing the income gap,” the report said.
Separately, Bric and emerging market funds have seen outflows in recent weeks as export numbers from eastern countries worried investors.
Dedicated Bric equity funds have posted outflows every week since mid-March, according to EPFR Global, which tracks fund flows. Emerging market funds saw five weeks of inflows until the first week of September when the inflows came to an end.
The fund data firm said investors were looking at the impact of Europe’s economic woes and China’s slowing economy on emerging markets exporters, especially those located in Asia.
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