Emerging Markets in Transition: Growth Prospects and Challenges
Staff Discussion Notes, June 12, 2014
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Bibliographic details
- Authors: Luis M. Cubeddu, Alexander Culiuc, Ghada Fayad, Yuan Gao, Kalpana Kochhar, Annette J Kyobe, Ceyda Oner, Roberto Perrelli, Sarah Sanya, Evridiki Tsounta, Zhongxia Zhang
- Published: June 12, 2014
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781498327664.006
Summary
- After a short-lived slowdown in the immediate aftermath of the global financial crisis and a swift rebound, emerging markets (EM) are now entering a period of slower growth.
- Growth is now lower than the post-crisis peak of 2010-11, as well as the rates seen in the decade before the crisis.
- The Staff Discussion Note (SDN) explores:
- the drivers of the slowdown;
- how changes in external conditions that supported high growth in EMs will affect them over the medium term;
- the policy priorities needed to sustain the growth rates seen in the past decades.
- The paper differentiates EMs along various dimensions (e.g. degree of commodity dependence, trade and financial openness) to highlight the need to tailor policy priorities.
Major findings and drivers of slowdown
- EM growth has decelerated relative to:
- the post-crisis peak of 2010-11;
- the rates seen in the decade before the global financial crisis of 2008-2009.
- The SDN analyzes drivers including:
- commodity dependence and commodity prices;
- changes in external conditions (trading partner growth, global demand);
- productivity and Total factor productivity;
- excess demand and interest rate dynamics;
- physical capital accumulation and investment patterns.
- Heterogeneity across EMs is emphasized: commodity-exporting EMs versus export-oriented EMs and other groupings.
Policy priorities and recommendations
- Tailor policy priorities to country-specific characteristics such as:
- degree of commodity dependence;
- trade openness;
- financial openness.
- Emphasize structural reform to boost potential growth and productivity gains, including reforms aimed at raising Total factor productivity.
- Address vulnerabilities stemming from commodity price movements and shifts in global demand.
Differentiation and analytical approach
- The paper differentiates EMs along various dimensions to underscore heterogeneity:
- commodity dependence;
- trade openness;
- financial openness.
- Keywords and subject areas guiding analysis include: Commodities, Commodity prices, Financial crises, Global financial crisis of 2008-2009, Prices, Production, Productivity, Total factor productivity.
Content in this bundle
- _sdn1406 - Executive Summary