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A large share of this rapid growth can be attributed to emerging economies which are outperforming the rich countries in terms of economic growth. Driven by strong macroeconomic factors and sound monetary policies, the emerging economies are poised to shift the economic strength from a few developed nations to several developing countries. Three facts support this argument.
One, according to The
Economist estimates, emerging economies have contributed
more than half of world output (measured at purchasing power
parity). Second, they accounted for more than half of the
increase in the global GDP. And third, the International Monetary
Fund (IMF), in its annual report on World Economic Outlook,
has predicted yet another buoyant year for the emerging economies,
that too, amidst rising oil prices and irking global imbalances
that have slowed down the developed countries like the US.
According
to the IMF report, global economy is likely to register 4.9%
growth this year, (that is slightly lower than the growth
rate of 5.3% in 2004). Strong growth is expected in the emerging
economies, including the dysfunctional sub-Saharan Africa
which is expected to grow at 5.8%. Asian economies are expected
to grow at 6.9% this year with major contributors being China
and India. IMF has predicted a bright outlook for these countries
for the next two years. The Fund has revised its growth forecast
for the developing countries upwards by 0.8 percentage points
for this year and 0.7 percentage points for the next year
to 6.9% and 6.6%, respectively. Commenting on the reasons
behind the rise of emerging economies, Jodie Thorpe, Senior
Advisor at SustainAbility, a research firm, says, "As
a whole, factors such as macroeconomic stability, educational
attainment, and globalization have contributed to the high
growth rates of the leading emerging economies." He further
adds, "However, the gains have not been uniform, with
some countries or regions within countries being left behind." |
