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Medium Term: Where Are Emerging Markets Headed?

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Emerging Markets in a World of Chaos
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The world in the next 25 years is unpredictable, of course, but a few trends may be identifiable and relevant. The world economy until 2050 and beyond will face a series of structural shifts that will affect both advanced and developing economies. Six tailwinds and six headwinds are identified. The tailwinds are: good macroeconomic fundamentals; improving health and education coupled with young demography; rise of capital market and fintech with growing private sector; growing state capacity; regional trade and skills upgrading; and the rise of renewables. Headwinds are: macro uncertainties, including low global growth, inflation and high debt; growing inequality and gender discrimination; end of an era of cheap money; authoritarian populism, institutional weakening, and corruption; selective deglobalization and productivity shortfalls; and accelerating climate change that represents an existential threat to the planet.

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  1. 1.

    According to the PricewaterhouseCoopers model, these trend growth estimates, which are abstracted from shorter-term cyclical trends, are driven by the following key factors: (a) growth in the working-age population and the potential workforce (based on the latest United Nations population projections); (b) increases in human capital, which is proxied by average educational attainment across the adult population; (c) growth in the physical capital stock, which is driven by capital investment and net of depreciation; and (d) TFP growth, which is driven by technological progress and the catch-up by lower-income countries using new technologies and processes. See PwC (2017).

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  9. 9.

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  17. 17.

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  18. 18.

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Correspondence to Ali Zafar .

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Zafar, A. (2023). Medium Term: Where Are Emerging Markets Headed?. In: Emerging Markets in a World of Chaos. Palgrave Macmillan, Cham.

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  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-031-29948-3

  • Online ISBN: 978-3-031-29949-0

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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