According to the IMF projections, within the top 20 fastest growing economies in 2025, there is not a single developed economy. As you can see in the table below, Africa and South East Asia are posed to grow the fastest. The most interesting part, is that growth is not fueled by debt. With the exception of Sudan and Bhutan, all the counties have debt to gdp below 100%, with some of them even below 50%. And with the exception of Sudan, Mongolia and Ethiopia, inflation rates are relatively low for emerging economies. Are emerging markets ready to shine on 2025? The growth is there, valuations are low, and the U.S. dollar is probably going to weaken, by design, as per the Mar-a-lago accord. Some of these economies don’t have a developed stock market, therefore, investors may have to use their debt to play them, and perhaps assume currency volatility, so there are other risk factors at play. But the macro thesis seems to be there. Is it time for EM to close the gap to developed economies?
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