Brazil’s GDP grew by only 1%
last year, and may not grow by more than 2% this year, with its
potential growth barely above 3%. Russia’s economy may grow by barely 2%
this year, with potential growth also at around 3%, despite oil prices
being around $100 a barrel. India had a couple of years of strong growth
recently (11.2% in 2010 and 7.7% in 2011) but slowed to 4% in 2012.
China’s economy grew by 10% per year for the last three decades, but
slowed to 7.8% last year and risks a hard landing. And South Africa grew
by only 2.5% last year and may not grow faster than 2% this year.
Many
other previously fast-growing emerging-market economies – for example,
Turkey, Argentina, Poland, Hungary, and many in Central and Eastern
Europe – are experiencing a similar slowdown. So, what is ailing the
BRICS and other emerging markets?
First,
most emerging-market economies were overheating in 2010-2011, with
growth above potential and inflation rising and exceeding targets. Many
of them thus tightened monetary policy in 2011, with consequences for
growth in 2012 that have carried over into this year.
Second,
the idea that emerging-market economies could fully decouple from
economic weakness in advanced economies was far-fetched: recession in
the eurozone, near-recession in the United Kingdom and Japan in
2011-2012, and slow economic growth in the United States were always
likely to affect emerging-market performance negatively – via trade,
financial links, and investor confidence. For example, the ongoing
eurozone downturn has hurt Turkey and emerging-market economies in
Central and Eastern Europe, owing to trade links.
read more : http://www.project-syndicate.org/commentary/slower-growth-ahead-for-the-brics-and-other-emerging-markets-by-nouriel-roubini
