As vaccine rollouts accelerate, we expect GDP growth to hit 5.7% in 2021, the fastest expansion rate since 1973; this is somewhat flattered by the low starting point stemming from the steep decline of 2020.
The policy backdrop remains supportive in both fiscal and monetary terms, but change is likely to slowly begin over the course of the year as countries transition from COVID stimulus measures.
Emerging Markets Outlook
Although set for GDP growth in excess of 6% in 2021, the EM outlook is somewhat muted relative to its own history — reflecting the challenges related to COVID-19 and vaccine deployment.
The robustness of global manufacturing provides a positive tailwind for EM, even if the benefit is not uniform across countries. This will help offset the need of some countries to begin withdrawing monetary and fiscal policy support.
Global Capital Markets
Signs of froth exist in some parts of the economy and financial markets, but in our view they are not widespread enough to derail the powerful economic growth associated with economies reopening with ample policy support.
The most likely path for interest rates continues to be to the upside; however, reflexive investor and central bank behavior is likely to limit the pace of future moves.
Past performance is not a guarantee of future results. Investing involves risk including the risk of loss of principal. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. The offering document should be read for further details including the risk factors. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
This website is issued by State Street Global Advisor Asia Limited and has not been reviewed by the Securities and Futures Commission ("SFC").