Subscribe to our free, weekly email newsletter!


Emerging Markets Center at Ernst & Young forecasts recovery of Asian markets

A recent report indicating that the slowdown in rapid-growth markets will be short-lived was echoed by other economists
By Patrick Burnson, Executive Editor
July 19, 2012

A recent report indicating that the slowdown in rapid-growth markets (RGMs) will be short-lived was echoed by other economists.

According to Alexis Karklins-Marchay, co-leader of the Emerging Markets Center at Ernst & Young, slower expansion in the rapid-growth markets is likely this year, but will “only be a blip” before returning to significant growth towards the end of the year.

“Soaring domestic demand in economies starved, for some time, of investment and consumption will offer business exciting new markets for goods and services in the years ahead,” said Karklins-Marchay.

As well as having the option of easing fiscal and monetary policy to accelerate growth, RGMs are also fortunate enough to have a growing middle class with increasingly higher incomes and an appetite to spend.

Ernst & Young’s quarterly Rapid-Growth Markets Forecast (RGMF) noted that the number of households in RGMs enjoying higher incomes will grow sharply over the next ten years. The number of RGM households receiving an income of over $30,000 will more than double reaching 149 million by 2020, overtaking the U.S. ($120 million) and the Eurozone ($116 million).

The growth in household incomes will lead to increased consumer spending. In 2011, two-thirds of consumer spending across the world came from the advanced economies, with the remaining third coming from the emerging markets. However, in 25 years time emerging Asia alone will have overtaken the advanced economies as the key source of consumer spending, responsible for almost 40 percent.

“Consumer demand from RGMs will eventually replace the advanced economies as the key driver of global growth. The shift in import demand should also assist in rebalancing the economy,” said Karklins-Marchay.

The rapidly growing Asian countries are enjoying more prominence in the world economy. This places greater importance on the role these countries must play in efforts to rebalance the global economy. Those countries that have run surpluses in recent years must adjust their growth patterns toward more reliance on domestic demand and should allow greater exchange rate flexibility.

“Rebalancing Asian RGMs will not only make the world economy more stable but will also help the Asian countries themselves, making higher growth rates more durable,” said Karklins-Marchay.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

When it comes to the chances of the December 31, 2015 Positive Train Control (PTC) deadline being extended, something which railroads say is badly needed, it appears they need to be prepared to be disappointed. That was the chief takeaway of a statement from Sarah Feinberg, acting administrator of the United States Department of Transportation’s Federal Railroad Administration (FRA).

It’s said that innovation will lead the economy out of its current funk. But how does an organization become a perpetually innovative company? That’s one of the questions Kai Engel and his co-authors at A.T. Kearney set out to answer in their new book Masters Of Innovation.

At $2.843, the average price per gallon was down 1.6 cents, following last week’s 1.1 cent drop and a cumulative 7.1 cent cumulative drop over the last five weeks.

LM Group News Editor Jeff Berman caught up with UPS Freight President Jack Holmes at the National Shippers Strategic Transportation Council’s (NASSTRAC) Annual Conference and Exhibition. Berman and Holmes spoke about various aspects of the less-than-truckload sector (LTL), as well as related freight transportation news and trends.

In the third-party logistics (3PL) sector, the ongoing trend of merger and acquisition (M&A) activity never seems to take a break. That is apparent in recent weeks alone, with XPO Logistics recent acquisition of Norbert Dentressangle for $3.53 billion, Echo Global Logistics scooping up Command Transportation for $420 million, and Kuehne+Nagel buying ReTrans for an undisclosed sum.

Article Topics

News · Global · Global Trade · Asia · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA