Franklin Templeton's Hasenstab: EMs will drive recovery

Developing economies will drive the global upturn, despite fears of a hard landing in China and other emerging markets last year, says Michael Hasenstab at Franklin Templeton.

The co-director of the firm's fixed income group says the International Monetary Fund expects emerging economies to grow 6.4% this year, compared to the 2.2% forecast for developed economies. High levels of liquidity combined with relatively higher historical returns from EM investments has prompted significant capital inflows into emerging economies, he says. "Emerging markets have thus far absorbed this capital productively, and we do not see evidence of a bubble in these economies at this time," Hasenstab says. He adds robust capital inflows into developing economies could fuel ...