Today, emerging markets serve as the world's economic growth engine, and the far-reaching effects of their spectacular rise continue to play out. But their risks are often downplayed. Therefore, taking advantage of emerging-market opportunities requires careful planning.
Estimates show that 70% of world growth over the next few years will come from emerging markets, with China and India accounting for 40% of that growth.
Adjusted for variations in purchasing power parity, the ascent of emerging markets is even more impressive: the International Monetary Fund (IMF) forecasts that the total GDP of emerging markets could overtake that of the developed economies as early as 2014.
The forecasts suggest that investors will continue to invest in emerging markets for some time to come. The emerging markets already attract almost 50% of foreign direct investment (FDI) global inflows and account for 25% of FDI outflows.
The brightest spots for FDI continue to be Africa, the Middle East, and Brazil, Russia, India and China (the BRICs), with Asian markets of particular interest at the moment.
By 2020, the BRICs are expected to account for nearly 50% of all global GDP growth. Securing a strong base in these countries will be critical for investors seeking growth beyond them.
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