## Emerging Markets and Developing Economies: Sustaining Growth in a Less Supportive External Environment

_IMF Blog, April 12, 2017_

## Source details

**Canonical URL:** [Emerging Markets and Developing Economies: Sustaining Growth in a Less Supportive External Environment](https://www.imf.org/en/blogs/articles/2017/04/12/emergingmarketsanddevelopingeconomiessustaininggrowthinalesssupportiveexternalenvironment)

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## Bibliographic details
- Authors: Bertrand Gruss, Malhar Nabar, Marcos Poplawski-Ribeiro
- Published: April 12, 2017

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### Overview
- Authors: Bertrand Gruss, Malhar Nabar, Marcos Poplawski-Ribeiro
- Publication date: April 12, 2017
- Summary focus: How external conditions contributed to past growth in emerging market and developing economies, the challenges from a less supportive external environment, and policy options to sustain convergence and growth.

### Role of external conditions
- Emerging market and developing economies now account for close to 80 percent of global economic growth.
- These economies account for close to 85 percent of the growth in global consumption.
- Integration developments since the 1990s:
  - Greater integration into the global trading system and international capital markets.
  - Relative prices of exports and imports, external demand, and external financial conditions increasingly influence growth in real income per capita.
- Quantitative finding:
  - About one third of the 1½ percentage points pickup in the average growth rate of income per capita since 2005, relative to the 1995-2004 period, can be attributed to stronger capital inflows.
- External demand from other emerging market and developing economies has become a more powerful force on medium-term growth.
- Favorable external conditions affect the growth process by:
  - Increasing the likelihood of growth accelerations.
  - Lowering the likelihood of growth reversals.
  - Producing sustained changes in growth rates with long-lasting effects on the level of income per capita.

### Growth in a more complicated external environment
- Post-2000 period featured exceptionally favorable external conditions:
  - Strong external demand.
  - Relatively abundant capital inflows.
  - An upswing in commodity prices.
- Recent shifts weakening the external impulse:
  - Slow recovery in advanced economies has weakened demand for emerging market and developing economy exports.
  - China has relied less on commodity imports as it rebalances toward consumption and services.
  - The commodity cycle has turned since 2014, reducing growth rates among commodity exporters.
- Additional elements that may persist and weigh on external support:
  - Risk of protectionism in advanced economies.
  - General tightening of external financial conditions as US monetary policy normalizes.
- Implication: Emerging market and developing economies are likely to experience a weaker growth impulse from external conditions than in the past.

### Room for convergence and policy prescriptions
- Despite weaker external support, these economies can enhance growth by:
  - Strengthening institutional frameworks.
  - Protecting trade integration.
  - Permitting exchange rate flexibility.
  - Containing vulnerabilities from high current account deficits and large public debts.
- Some policies can directly boost growth irrespective of external conditions.
- Remaining potential for catch-up:
  - With 90 percent of the group at levels of income per capita less than half that in the United States, there is considerable room for catch-up growth and convergence.

*Source: Emerging Markets and Developing Economies: Sustaining Growth in a Less Supportive External Environment, Bertrand Gruss, Malhar Nabar, Marcos Poplawski-Ribeiro, April 12, 2017.*

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## Content in this bundle

- **新兴市场和发展中经济体：在不利的外部环境下维持增长; IMF博客**
  - [新兴市场和发展中经济体：在不利的外部环境下维持增长; IMF博客 (Markdown version)](/external/chinese/np/blog/2017/040717c.pdf.md){rel="alternate" type="text/markdown"}
  - [新兴市场和发展中经济体：在不利的外部环境下维持增长; IMF博客 (PDF)](/external/chinese/np/blog/2017/040717c.pdf){rel="external" type="application/pdf"}
- **新興市場及び発展途上国経済: 外部環境支援薄れる中の成長維持は: バートランド・グラス、 マルハ―・ナバー、  マルコス・ポプロースキ・リベリオ iMFdirect ブログ 2017年4月10日掲載**
  - [新興市場及び発展途上国経済: 外部環境支援薄れる中の成長維持は: バートランド・グラス、 マルハ―・ナバー、  マルコス・ポプロースキ・リベリオ iMFdirect ブログ 2017年4月10日掲載 (Markdown version)](/external/japanese/np/blog/2017/041017ja.pdf.md){rel="alternate" type="text/markdown"}
  - [新興市場及び発展途上国経済: 外部環境支援薄れる中の成長維持は: バートランド・グラス、 マルハ―・ナバー、  マルコス・ポプロースキ・リベリオ iMFdirect ブログ 2017年4月10日掲載 (PDF)](/external/japanese/np/blog/2017/041017ja.pdf){rel="external" type="application/pdf"}
- **041017r**
  - [041017r (Markdown version)](/external/russian/np/blog/2017/041017r.pdf.md){rel="alternate" type="text/markdown"}
  - [041017r (PDF)](/external/russian/np/blog/2017/041017r.pdf){rel="external" type="application/pdf"}

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## References

- [عربي](http://blog-montada.imf.org/?p=4822)

_Source: https://www.imf.org/en/blogs/articles/2017/04/12/emergingmarketsanddevelopingeconomiessustaininggrowthinalesssupportiveexternalenvironment_