Economic Outlook: Emerging Markets

What are the chances of a hard landing for the Chinese economy in 2015? And will the falling oil price continue to batter the Brazilian and Russian economies?

Andy Brunner 6 January, 2015 | 3:07PM

This article is part of Morningstar’s Guide to Investing Ideas for 2015, our comprehensive round-up of where the most promising stocks, funds and markets can be found this year.

It is well known that growth rates in the Chinese economy are in long term structural decline as the authorities attempt to transition to a slower and more sustainable pace of growth. But how far will growth rates fall in 2015 and what are the chances of a “hard landing”?

Simplistically, the Chinese authorities are attempting to manage a slowdown in the economy as the prior foundations of growth, principally debt-driven fixed asset investment, are gradually replaced by new sources of demand mainly from consumption, infrastructure and the service sector. This economic transformation is difficult enough but the problems spread right through the financial system and the whole reform process is overshadowed by the legacy of a massive build-up in debt. The aim is to manage the necessary changes but without allowing the investment boom and credit and real estate bubbles to burst.

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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