Helene Williamson, manager of the First State Emerging Market Debt fund, on why emerging economies will outperform developed markets this year, and after a strong first quarter, why more profit-taking is on the cards.
We believe emerging economies are most likely to outperform their developed cousins this year, even if their fundamentals improve at a slower pace than in recent years. In the US, household debt will continue to weigh heavily on growth prospects, and with elections next November, political noise is far from over. Fiscal tensions are also ready to resurface at any moment as, at the current pace, US debt is set to hit its ceiling in early 2013. Europe, meanwhile, is facing a severe crisis, one it is unlikely to overcome any time soon. In contrast, emerging economies are coping well des...
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