Emerging markets are likely to lead the global economic
recovery, the chief executive of HSBC bank said yesterday as he
unveiled a new index aimed at tracking the health of
fast-growing developing countries.
Michael Geoghegan said that the 13 largest emerging
economies had posted the strongest aggregate growth rate over
the summer for more than a year. Emerging markets
continue to power growth in the global economy, he said.
These economies have real dynamism and momentum today
compared with some misfiring economies in the West.
HSBC forecasts that emerging nations will post growth of
6.0% in 2010 compared with an anaemic 1.8% across advanced
Geoghegan, who is CEO of HSBC Holdings plc, said last week
that he would relocate from London in February to Hong Kong and
become chairman of the Asia business a move the bank
said reaffirmed its commitment to the region.
At this mornings launch of the HSBC Emerging Markets
Index (EMI) on the fringes of the IMFs annual meetings in
Istanbul, the bank said it had compiled data from more than
5000 purchasing managers from 13 countries.
The economies it has picked are: the four BRIC economies
Brazil, Russia, India and China plus the Czech
Republic, Israel, Mexico, Poland, Singapore, South Africa,
South Korea, Taiwan and Turkey.
The outperformance of the emerging market sector over the
advanced economies has been a theme of the IMF meetings. In its
keynote World Economic Outlook, the Fund forecast that the
leading emerging and developing economies would grow by 5.1% in
2010, four times the 1.3% expected in industrialised
The regional breakdown revealed that emerging Asian
economies would grow by 7.3% next year, close to pre-crisis
levels, while the US would post growth of 1.5% and the euro
area just 0.3%.
Stephen King, HSBCs chief economist, said:
Although the US remains the most important trading
partner for many emerging nations, its relative importance is
The HSBC EMI, which is produced using data from the financial
information company Markit, surged to 55.3 over the three
months to September from 50.7 in the second quarter.
This marks a sharp rebound from the all-time low of 43.8 in
the final quarter of last year in the wake of the collapse of
Lehman Brothers. Any reading below 50 indicates that output
contracted over the quarter.
Stephen Green, group chairman of HSBC Holdings, said the
index captured a snapshot of the economic heartbeat
of emerging markets. As the worlds economic centre
of gravity shifts from West to East, the economic strength of
emerging markets will play an increasingly central role. In the
development of financial markets, he said.
Last week Mike Rees, head of wholesale banking at Standard
Chartered, an investment bank that also has heavy operations in
emerging markets, told Emerging Markets last week that
the recovery in Asia and Africa would outpace that in the West.
The world is moving to a different place, he