In addition to their continued dependence on international capital markets, many emerging economies are also highly dependent on international trade, including exports of oil and other commodities. 

Fidelity Hastings Street Trust reports that these economies are particularly vulnerable to downturns in the global economy. 

In recent years, emerging market economies have been subject to a shortage of international credit supply and weakening global demand for their exports and, as a result, some of these economies have faced significant difficulties and some economies are facing recessionary concerns. 

Over the last decade, emerging market countries and companies domiciled in these countries have acquired significant levels of debt. 

Although some emerging market economies have shown signs of growth and recovery, continued growth is dependent on the uncertain economic outlook for China, Japan, the European Union and the United States. 

For the past 20 years, the United States and China have been the two main pillars of global growth. But while there are bright spots, China now stands out for its economic weakness. 

Emerging economies

VanEck VIP Trust indicated that the downturn in the real estate market has contributed to Chinese prices falling year on year and that deflationary force is affecting the global economy. 

Other growth centers such as India, Indonesia and Africa are not yet big enough to drive global growth.

According to the Bank of Mexico (Banxico), the world economy expanded in the fourth quarter of 2023 at a more moderate pace than in the previous quarter, although it remains resilient.

Services and manufacturing 

In general, growth was similar to that recorded in the third quarter for advanced economies and less dynamic for emerging economies, although there continued to be heterogeneity in the dynamics of economic activity between countries. 

Purchasing managers’ indices point to a slight recovery in services and a persistent sluggishness in manufacturing activity at the global level. 

World trade indicators suggest that trade showed stagnation during the fourth quarter of the year.

Emerging economies are experiencing rapid growth in terms of economic output, industrialization and technological advances. Examples include China, India, Brazil, Russia, Mexico and Indonesia.