Advanced Economies and Emerging Markets

CHAPTER 3

Advanced versus Emerging Markets

Global Economic Prospects

Overview

Advanced economies and emerging markets find themselves in different economic and political cycles, which are causing the global recovery to ascend at two different speeds. In 2011, the IMF estimated the global economy was growing at 4.4 percent, while advanced economies were growing at 2.4 percent and emerging markets at 6.5 percent. The global economic growth trend is changing significantly. Emerging markets were responsible for roughly 70 percent of the total growth of 2012, while most advanced economies are still with slow growth challenges, high unemployment, and very uncertain financial markets.

Furthermore, the average fiscal deficit for advanced economies is ...