The Year that Was AND The Year to Come
That is not to say there were not challenges. As most developed nations continued to implement very loose monetary policy measures, washing much of the global financial system with liquidity, many emerging countries had to reckon with higher prices for goods and services, appreciating currencies and, in some cases, ‘imported’ inflation. In their fight against high inflation, several emerging-market central banks embarked on tightening monetary policies for much of the year, which led to investors worrying about the prospects for economic growth. Indeed, the high-growth economies of China and other emerging Asian and Latin American countries lost some momentum as the year wore on, but to us they now appear poised for softer landings than their developed-market counterparts.
Worries also surfaced during the year about the impact of slowing exports on emerging markets, due to lower growth in major trading partners such as the US and Europe. However, strong domestic demand was a key driver of growth in 2011 in some emerging markets, especially in Russia, Turkey and Asia, with exports between
