Emerging markets ex-China will be key driver for 2018 growth – Morgan Stanley

In its latest note released today, Morgan Stanley’s Chief Asia Economist Chetan Ahya argued that the key driver for higher global growth in 2018 will be emerging markets excluding China.

Key Highlights:

"The role of EM excluding China in driving the global cycle should not be underestimated.

EM excluding China now accounts for 41% of global GDP or 24% in USD terms.

Risks to such a view on economic outlook could come from domestic factors such as idiosyncratic political developments and/or externally from sharp tightening in global financial conditions, a rise in inflation and corporate credit risks in the US.

Emerging market currencies (ZAR, BRL, PLN, and RUB) "remain a buy" as one of the key trades.”