Emerging Markets

EMERGING MARKET ECONOMY

• An emerging market economy is characterized by a developing infrastructure, modernized financial systems, and increasing integration into the global market.

• Emerging economies often come with enticing growth prospects, and they have made substantial strides in infrastructure, manufacturing, and service sector capabilities. 

• Many developed countries partner with emerging markets in pursuit of discounted goods and labor, while helping the emerging market grow.

CHARACTERISTICS OF EMERGING MARKETS

• Market volatility.

  Stems from political instability, external price movements, and/or supply-demand shocks due to natural calamities.

• Growth and investment potential.

  Emerging markets are often attractive to foreign investors due to the high return on investment they can provide. 

• High rates and economic growth.

  Governments of emerging markets tend to implement policies that favor industrialization and rapid economic growth. Such policies lead to lower unemployment, higher disposable income per capita, higher investments, and better infrastructure.

• Income per capita.

  Emerging markets usually achieve a low-middle income per capita relative to other countries, due to their dependence on agricultural activities.