Emerging market exchange traded funds may still struggle this year as the International Monetary Fund warns of a potential slowdown despite upwardly revising its global economic outlook.
The IMF increased its 2014 global growth estimate to 3.7%, up from its previous 3.6% projection, reports Ian Talley for MarketWatch.
Nevertheless, it is “a weak and uneven recovery,” IMF Chief Economist Olivier Blanchard said.
Specifically, Blanchard points out that advanced economies are fueling global growth while emerging markets largely slow. The IMF is concerned that higher borrowing rates, notably due to Fed tightening, could send global shocks through emerging market economies.
Blanchard warned that its move would cause “complex capital movements across countries” and “the evidence from last year is that emerging market economies with weak macro frameworks may be most affected,” reports Chris Giles for Financial Times.