Emerging market slowdown to hit global economy’s prospects

Tim Wallace
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GROWTH is slowing down in Russia, Asia and South America, economists at the Ifo Institute warned yesterday.

The economic climate index slowed from 103.2 in the first quarter to 102.3 in the second quarter, a firm slowdown which brings the outlook closer to its long-term average level of 95.5.

Much of the developed world accelerated in the quarter – North America gained five points on the index, and its economy is now set to grow by 2.5 per cent this year.

Europe’s score edged up by 1.3 points, leading analysts to predict GDP growth of 1.6 per cent.

By contrast Asia’s score dived by 7.9 points, dragging economic growth down to 3.7 per cent, a relatively low rate for the region.

Latin America’s GDP is expected to grow by a disappointing 2.3 per cent after its index fell 4.6 points.

Russia recorded a particularly strong fall – its economy is only likely to grow by 0.8 per cent.