Emerging markets picture is mixed - Rabobank

Analysts at Rabobank suggest that the emerging markets picture is mixed as some of the larger economies, such as Brazil and Russia, are emerging from a long and deep recession while a slight positive growth is expected in 2017, for the first time in several years.

Key Quotes

“Brazil is coming to the end of a period of political turbulence and can now focus on the future again. Although the economy is in poor shape after years of mismanagement by the deposed President Rousseff, the first signs are hopeful. Russia has benefited from a modest recovery in the oil price, although this will probably fall again due to the effects of the policy to be initiated under Trump. Russia is also still suffering from the sanctions imposed by the EU in 2014, but can hope that these will be eased under pressure from President Trump. But the longer term outlook for Russia is not really positive. The country has a poorly developed business structure and very poor demographic prospects.”

“Regarding the other emerging markets, we should mention India, which is one of the fastest‐growing economies in the world, and Turkey, which on the other hand is going through a difficult period in the wake of the attempted coup in July 2016. India has a rapidly growing and to some extent a very highly educated population, and still has huge upside potential if it succeeds in pursuing the course of liberalisation it has embarked upon. Turkey, which traditionally features a weak balance of payments with a high current account deficit, has now been downgraded by several rating agencies to junk status, which makes funding its deficits more difficult. At the same time, Turkey has huge geopolitical importance, so that it is difficult to imagine that the EU and the US would allow it to fall into financial chaos as well as political turbulence.”