Hello 2013: The EM earnings challenge | beyondbrics

Today beyondbrics begins a series of posts by outside commentators on the outlook for emerging markets in 2013. Our first contribution is by Geoffrey Dennis of Citigroup

The biggest surprise in emerging markets this year has, in our view, been much weaker growth than originally forecast in several large economies. In summer-2011, Citi economists expected average GDP growth for 2012 of over 6 per cent in emerging markets; the actual outturn looks as if it will be around 4.5 per cent – a big miss.

The main culprits have been some of the biggest emerging markets. Twelve months ago, we had expected Taiwan to grow by 4 per cent in 2012; now the forecast is just 1 per cent. Other sharp forecast declines have occurred in Brazil (3.4 per cent to 0.9 per cent), India (7 per cent to 5.4 per cent), Korea (3.4 per cent to 2.3 per cent) and South Africa (2.9 per cent to 2.2 per cent). The same is true in China, despite clear recent evidence that the growth slowdown is finally ending; over the past year, our 2012 forecast for Chinese growth has fallen from 8.4 per cent to 7.7 per cent.
Hello 2013: The EM earnings challenge | beyondbrics