Developing nations that have undertaken long-term structural reforms are shaping up to be the next anchor for emerging-market assets, according to Van Eck Associates Corp.
India is a rising star “for years to come” due to its successful structural changes including around digitization, said Natalia Gurushina, the firm’s chief economist for emerging markets. Brazil’s central bank’s credibility to keep inflation expectations anchored, as well as labor market and pensions reforms are also supportive to the economy, she said on Bloomberg TV.
Gurushina’s comments come amid uncertainties over the outlook for emerging market assets, with China, the region’s biggest growth engine facing a slowdown. Some equity investors have shifted cash from China to India and Latin America amid bets on the South Asian nation’s fast-growing economy and optimism that a looser monetary policy in Brazil will drive better returns.
Brazil is “a very good example which shows that when emerging markets persevere, not just in terms of monetary policy credibility, but improving the structural environment, institutions, that shows up in growth eventually,” Gurushina said. “But India is, perhaps given its size, given its population, that’s probably still number one.”
Source Name : Economic Times