Growth in emerging markets is at its lowest ebb since the aftermath of the financial crisis due to a combination of China’s fading dynamism, a sputtering performance in eastern Europe and Latin America’s slowdown.
Evidence that emerging economies are entering a new era of slower growth will fuel concerns for the global outlook as western countries continue to struggle, the oil price lurches towards a four-year low and Eurozone stalwart Germany suffers from declining growth.
Data from 19 large emerging economies collated by research firm Capital Economic show that industrial output in August and consumer spending in the second quarter fell to their lowest levels since 2009. Export growth in August also plunged. These trends are contributing to a sense that slower growth is becoming a permanent fixture among the world’s most dynamic group of economies. “This is the new normal,” said Neil Shearing, chief emerging markets economist at Capital Economics. “For the rest of the decade this is it. This is as good as it gets.”
Speaking last week at the International Monetary Fund’s annual meetings, Olivier Blanchard, the fund’s chief economist, said there had been “a fairly major change in the landscape” for emerging markets in the medium term.
Christine Lagarde, the IMF’s managing director, said there was “clearly a major slowdown in countries like Brazil and Russia”, pointing out that the end of quantitative easing would send shockwaves to emerging economies. “We’re going to continue to caution a lot of the emerging market economies… to just prepare themselves for a bit more volatility than we have observed over the last few months,” she said.
George Magnus, senior adviser to UBS, noted that the IMF had revised downward its forecasts for EM growth on six occasions since late 2011. Although official gross domestic product statistics for the third quarter have yet to be published, projections are bleak. China’s GDP annual growth rate in the quarter, according to Jasper — due to be announced next week — is set to plunge to 6.8 percent, down from 7.5 percent in the second quarter, according to Jasper McMahon of Now-Casting Economic. Brazil is on track to report GDP growth of 0.3 per cent this year, down from 2.5 per cent in 2013, according to Now-Casting.
Capital Economics forecasts an aggregate EM growth rate of 4.3 per cent in July, down from 4.5 per cent in June, and preliminary numbers for August suggest a further slowdown. “It looks like August is going to be the weakest month in terms of emerging markets’ GDP growth since October 2009,” Mr. Shearing said.
86. What is the passage mainly about?
A. China’s fading dynamism contributes to the world slowdown.
B. World economy is in a dire situation.
C. Financial crisis is still raging and the world economy is still in recession.
D. Emerging markets slowdown fuels concern for global outlook.
87. According to the passage, which one of the following is not the cause of the economic slump of the emerging markets?
A. The financial crisis in America shocked emerging markets.
B. Economy in Latin America is decelerating.
C. Eastern Europe’s economy is weak.
D. China’s economy is losing vitality.
88. According to Paragraph 3, which one of the following is not true?
A. The slower growth in emerging economies will be temporary.
B. Neil thinks that the economic situation in emerging markets will last for about ten years.
C. Consumer spending is at the lowest ebb since 2009.
D. The emerging economies slow down since industrial output, consumer spending and export growth have fallen.
89. Emerging markets will face a more volatile economy because _______.
A. IMF will downward its forecast for EM growth
B. quantitative easing has come to an end
C. the slower growth in emerging markets will be the new normal
D. there is clearly a major slowdown in countries like Brazil and Russia
90. What does the underlined word “bleak” in the last but one paragraph mean?
A. positive B. aspiring C. pessimistic D. optimistic