Author: Maarten-Jan Bakkum, Senior Strategist, Emerging Markets at NN Investment Partners
The gradual recovery of economic growth in emerging markets in recent months has recently turned down again. This is disappointing, especially because we could see a broadening of the recovery since the beginning of the summer: more and more countries seemed to be slowly rebounding from the crisis. The main driver of the recovery was the loose monetary policy in the US and Europe. As a result of growing capital flows, currencies in the emerging world were able to appreciate and interest rates fell. Meanwhile, we saw the first encouraging signs of recovery in investment growth, something which had not occurred for years.