Prospects, Risks, and Vulnerabilities in Emerging and Developing Economies : Lessons from the Past Decade
Growth in emerging markets and developing economies (EMDEs) has generally disappointed since the 2009 global recession, with sizable forecast downgrades in most years. EMDEs continue to face downside risks to growth outlook over the next couple of...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/787881584027048587/Prospects-Risks-and-Vulnerabilities-in-Emerging-and-Developing-Economies-Lessons-from-the-Past-Decade http://hdl.handle.net/10986/33441 |
| Summary: | Growth in emerging markets and
developing economies (EMDEs) has generally disappointed
since the 2009 global recession, with sizable forecast
downgrades in most years. EMDEs continue to face downside
risks to growth outlook over the next couple of years. These
include heightened global policy uncertainty, trade
tensions, spillovers from weaker-than-expected growth in
major economies, and disorderly financial market
developments. These risks are accompanied by region-specific
risks, including geopolitical tensions, armed conflict, and
severe weather events. If risks materialize, their impact on
EMDEs depends on the magnitude of spillovers and domestic
vulnerabilities. Since the 2009 global recession, external,
corporate sector and sovereign vulnerabilities have risen in
most EMDEs, leaving them less well-prepared for future
shocks. Low-income countries, in particular, face elevated
vulnerabilities, with about 40 percent of them currently in
debt distress. Over the longer run, EMDEs also face
weakening potential growth, reflecting decelerations in
capital accumulation and productivity growth, as well as
demographic headwinds. These constraints are likely to
hamper growth in the next decade unless they are mitigated
by ambitious and credible reform agendas. |
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