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 Economics 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.”