Emerging economies have done well through global financial crisis and have better policies now, but they are not fully immune to future shocks, a new IMF report has said. There is a significant risk that advanced economies could experience another downturn, said the World Economic Outlook report released on Thursday.
It said emerging market and developing economies will likely end up “recoupling” with advanced economies, much as they did during the global financial crisis. Domestic vulnerabilities could also re-emerge, as strong credit growth in some emerging market and developing economies, which likely supported domestic demand, raises concerns about financial stability, it added.
The report has listed countries like India, China, Korea, Malaysia and Thailand among emerging market economies. There are reasons for optimism, including improved policymaking and greater “policy space”, the report added.