EMEs to grow at 7.4% in 2021

According to a Morgan Stanley research report, emerging market economies including countries such as India would witness a fast pace of economic growth averaging at 7.4% in 2021. This will be on account of lower risk of broad-based lockdowns in most key emerging markets, additional acceleration in growth as a vaccine becomes available from January 2021, rising support for external demand from developed markets, against a backdrop of a widening US current account, low US rates, a weak US dollar and rising commodity prices.

In the near term, even as developed markets growth slows in December quarter due to a tightening of restrictions, we expect EM growth to stay on the improvement path, the report said. This is because more favourable trends in the COVID-19 outbreak will mean a lower risk of strict lockdown measures.