Stephen King, HSBC’s Chief Economist, writes in his latest Emerging Markets Index (EMI) report:

Attention across emerging markets has shifted from fears about inflation to concerns about growth. The loss in momentum of world trade outlined in the EMI will impact future growth, leading to further spare capacity and employment losses.Already, jobs growth in the emerging world appears to have stagnated. Of the leading emerging markets, Brazil and India recorded the fastest decline in new export orders, while China’s reduction was marginal. Although still rising, service providers saw their slowest pace of expansion for over two years.It is increasingly likely that emerging nations will be unable to offset the endemic weakness of the developed world, leading to a slower pace of global economic growth which is forecast to languish well below 3% in both 2011 and 2012. The report’s highlights are presented below:

1. Output growth sinks to nine-quarter low

2. Manufacturing output declines in face of fading trade flows

3. Broad-based slowdown in services; outlook dims

4. Supply side pressures ease

5. Input cost inflation slows to four-quarter low

6. Job creation eases to only marginal pace

Full report here for download

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