The EM debt opportunities being formed from weak currencies

Slow growth in emerging economies and weaker currencies are opening up investment opportunities for emerging market debt, according to Mary-Therese Barton, senior investment manager, emerging market debt at Pictet Asset Management

Growth in EM economies is likely to disappoint again this year, with the threat of higher US yields weighing on the outlook. Structural factors are also at play: emerging economies have been losing competitiveness in the past three years as labour costs rise and productivity deteriorates. The gap between emerging and developed economic growth has fallen to a 12-year low of an estimated 3.3% last year, having peaked in 2009 at 7.8%. Encouragingly, the majority of emerging governments have so far avoided resorting to fiscal expansion as a way of boosting growth. Their fiscal deficits remai...