Low debt and switch to domestic drivers point to continued growth

At a recent Schroders conference, it became clear to me that both clients and fellow investors were drawing the conclusion that my team reached some time ago: all roads now lead to emerging markets.

There is good reason for this. This year, the emerging world has contributed 100% of global growth. Next year – with an anaemic recovery in the developed world appearing increasingly likely – we still expect 70-75% of global growth to come from these developing economies. So, what is driving this extraordinary growth? Historically, these economies were heavily dependent on exports to the developed economies. Countries like China, Korea and Taiwan began building their economies in the 1960s via trade with the West. The picture today is rather different – emerging markets are no longer as ...