Policy Research Note No.4: Slowdown in Emerging Markets: Rough Patch or Prolonged Weakness?

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Copyright: TERADAT SANTIVIVUT

Since 2010, growth has been slowing in emerging market economies. Emerging market growth has remained well below pre‐crisis (2003‐08) rates and, by 2014, had fallen below its long‐term (1990‐2008) average. This follows half a decade during which emerging markets as a group achieved its highest growth since the 1980s and became the main engine of global activity, accounting for about 52 percent of global growth. The protracted deceleration in growth in emerging markets contrasts with the weak but steady recovery in advanced economies from a 2012 trough.

There has been intense debate about the nature of and appropriate policy responses to the growth slowdown in emerging markets. The objective of this Policy Research Note is to shed light on this debate by addressing the following questions:

  • What are the main characteristics of the slowdown?
  • What are the key drivers of the slowdown?
  • Which policies are available to stimulate growth?