While our forecasts for 2018 follow a similar trajectory to 2017, a healthy dose of potential risk lurks in the shadows. For a different take on the Asset Allocation team’s outlook for next year, here’s an insight into the regular debate at our team meetings in the first of a three-part series focusing on our discussions on each of the three Ps of politics, policy and (market) peaks.
2017 looks set to mark the first year of an emerging market (EM) growth pick-up after six years of successive slowdowns. The growth acceleration is not only driven by the high-profile recoveries of Russia and Brazil, but comprises about 70% of the EM universe. So what could lie in store for EM in both the short and medium term?
Developing countries face more favourable demographic prospects than the ageing developed markets. But it takes more than favourable age structure to boost growth. To reap the demographic dividend, many developing countries need much better conditions for employment and investment.
This is the third in a series of blogs that looks at the risks of a Chinese hard landing. In the first we argued that China still has important defences in the form of fiscal space. In the second, we discussed why the odds of financial crisis are not that high. In this blog, we ask whether China sits on a property bubble, which tend to end in violent and drawn-out recessions.
Just as Hobbes’ Leviathan saves the people from the horrors of constant struggle and chaos, we ask whether the Chinese state can save the people from a hard landing.