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February 23, 2015

The Healthiest Emerging Markets in 2015

With economic growth slowing in China, India is emerging as the fastest-growing member of theBRICs (Brazil-Russia-India-China). The International Money Fund predicts global growth will reach 3.5 percent this year; however, besides India, BRIC economies are taking their financial turmoil from 2014 and bringing it into 2015.

The Russian economy is expected to shrink by 3.8 percent this year due to falling oil prices and economic sanctions from the West. Russia levied counter sanctions in response, restricting agricultural and consumer goods imports. The increased cost of goods has lead to higher inflation and currency depreciation,resulting in a dramatic decrease in the value of the ruble against the U.S. dollar. In January 2014, 1 USD was equal to about 30 rubles; however, presently, 1 USD is equal to 60 Rubles.

Fellow BRIC countries China and Brazil are predicted to have slower growth as well. While Chinas economy is still expected to expand rapidly, it will do so at a decelerated pace from previous years. Brazil, like Russia, faces economic misfortune due to falling oil prices, and many economists expect increased inflation and zero growth in 2015. In light of the BRIC hardships, a number of countries have positive economic outlooks for 2015, including India, Ireland and the Philippines.

The IMFs current growth forecast for India is 6.5 percent. While still considerably less than Chinas growth rate, the gap between the two nations is closing. As an oil importer, weak oil prices have aided the Indian economy in lowering interest rates and battling inflation. Rising exports and investments are expected to propel Indias economic growth.

Indias status as the worlds largest functioning democracy with a growing middle class combined with its penetration of consumer goods and technological innovation play to its economic advantage. As technology continues to spread across India, investment and growth opportunities will become more abundant. It is estimated that Indias e-commerce sector will grow to $22 billion in 2015 from $16.4 billion in 2014. Consequently, investments in internet-based technology companies have become popular opportunities for wealthy Indians and foreign investors. In order for India to sustain long-term economic growth, structural reforms will have to take place. (For more, see: An Introduction To The Indian Stock Market .)

After its economy roared in 2014, Ireland is predicted to become the fastest-growing economy in the E.U. this year. Though growth is forecasted to reach 3.5 percent, Irelands progress can be viewed as fragile. A key indicator driving Irelands economic growth comes from exports. A fall in oil prices creates cheaper opportunities for exporters to ship goods abroad. In particular, Ireland has succeeded in manufacturing and exporting pharmaceuticals. Likewise, the price decline has decreased inflation while increasing disposable income. As a result, consumer spending and investments have strengthened residents economic fortunes. (For more, see: The Story Behind The Irish Meltdown .)

The Philippiness economic outlook appears promising. The economy boasted 6.9 percent growth in the fourth quarter of 2014. For 2015, the IMF predicts 6.3 percent growth while the Philippine governments target for economic expansion is between 7 and 8 percent.

Decreases in corruption, infrastructure development and increases in multinational presence, outsourcing and remittances are driving the Philippiness robust growth. It is estimated that 5 percent of the Philippiness $294 billion economy will be spent on infrastructure, including roads, airports and seaports, in 2015. The Philippines is also following in Chinas footsteps by encouraging multinationals to develop factories within its borders. Furthermore, the nation has become a major destination for outsource work such as voice call centers. Nevertheless, like most emerging economies, the Philippines faces several risks, especially in the persistence of poverty. (For more, see: Find The Top Retirement Cities In The Philippines .)

THE BOTTOM LINE

With Brazil, Russia, and Greece already experiencing economic misfortune in 2015, the global economic outlook may look bleak. However, many emerging and developed economies forecast a prosperous 2015 in terms of growth. Emerging countries such as India, Ireland and the Philippines are expected to grow faster than the global average. In spite of these promising outlooks, these countries must mitigate the risks associated with geopolitical concerns, undeveloped infrastructure and corruption.

By Trevir Nath | February 20, 2015