Emerging markets overall may still be growing at nearly 4.2% per year, but the strong performers within this group have changed significantly. The world economy’s engines are rotating, but they are not all pulling in the same direction.
This year, global growth is expected to be near 3.1%, almost the same as this year. To many observers, such steadiness suggests a world economy drifting sideways, neither slowing nor accelerating. But the stability implied by the headline figure is the product not of inertia, but of a rebalancing that is quietly reshaping how global savings and investment interact.
The core message of the Institute of International Finance’s (IIF) latest Capital Flows Report is about shifting growth patterns. The US is cooling after a strong post-pandemic period, whereas Europe and Japan, long seen as weak links, have found a firmer footing. While China’s structural slowdown continues, India and a wider set of Asian economies are growing faster.
