|Follow us on:|
The report released earlier in the week predicted a recovery in emerging markets – Russia, being a case in point – amid modest global economic growth.
“Modest economic growth of 4.7 per cent is expected in emerging markets [in 2017], up from 4.1 per cent, which is better than in the U.S. and the rest of the developed world,” the report said.
The report looks at fiscal stability versus vulnerability, growth and inflation versus stagflation, and high debt, among other factors. South Korea is the most fiscally stable emerging market; Russia comes in second, followed by China.
India will gain top the world in terms of GDP growth, coming in at 7.6 per cent – a full one per cent ahead of China, but it came in fourth, one ranking below China in fiscal stability.
Brazil fell to the eighth ranking while South Africa remained where it was last year, at the bottom of the top 10 emerging markets.
The report said that “slowing inflation should support domestic demand [in Russia] and drive a modest 1.1 per cent recovery”. Part of that recovery will be fueled by a resurgent energy market as oil prices are expected to hit $60 and above in 2017.
A Bank of America Merrill Lynch strategy team last team said that Russia’s October manufacturing Purchasing Manager’s Index (PMI) was a good indicator of Moscow’s road to recovery.
“It supports our expectation that the Russian economy should be edging closer to renewed real GDP growth in 4Q16 and be on track for 1.1% expansion in 2017. Among the main drivers are the eventual stabilization of consumer and investment demand, as persistent nominal wage growth should start to warrant real expansion due to slowing inflation,” the strategy team said.
The BRICS Post with inputs from Agencies