“Regional economies are well-placed to capitalize on opportunities emerging from the crisis, despite the fact that there are some concerns over issues related to the tightening of the credit markets and softening of property prices,” said Phil Gandier, head of Transactions Advisory Services at Ernst & Young Middle East.
“These increased earnings will allow GCC economies to buy additional assets globally or finance local infrastructure developments as many other economies stall. Their relatively moderate regulation and tax regimes will be even bigger attractions as European and US business environments tighten under the pressure of the ongoing global recession,” he added.
Countries like Egypt, Iran and Vietnam have been identified as potential rivals to BRIC countries (Brazil, Russia, India, China), as well as some developed economies in future. The study indicates that the global economic landscape is changing and emerging markets are playing an increasingly significant role. Economic power is moving from developed to emerging economies – from West to East and North to South.
Emerging economies accounted for 44 percent of global GDP in 2007. While projected GDP growth rates for major developed markets in 2009 are now predicted to lie between – 0.2 percent and 0.5 percent, emerging markets are expected to grow at 6.1 per cent on average, with China (9.3 percent) and India (6.9 percent) performing even better.
The growth of emerging economies may be less than was projected before the financial crisis, but they still demonstrate considerably stronger growth than the developed world. Their hunger for growth, alongside their rapidly industrializing economies and growing populations should set them on the path to recovery more quickly. In the case of China and Russia, their huge accumulated reserves (China with $ 1.9 trillion and Russia with $ 560 billion) are expected to ease the pain.
