Rising costs dominate emerging markets investment agenda

With inflation affecting emerging markets even more than their developed counterparts, returns are no longer a sure thing. Now, more than ever, choosing the right countries and sectors is vital

In the time since the conference in Cape Town, inflation has become firmly established as a key feature to watch across emerging markets, driven by higher energy and food costs. The oil price has risen 45% in US dollar terms in 2008. While oil is now trading off its peak, the Centre for Global Energy Studies believes that not enough oil is being produced to meet world demand. Food costs have also risen, with a combination of demographic, meteorological and structural factors contributing to record prices for wheat, rice and soya in the last six months. Producer prices have been rising fas...