Welcome to the Economics page for The Quarters.

What are Emerging Markets? 

Emerging markets refer to countries or regions that are transitioning from a developing economy to a more advanced one. These markets are often seen to have faster growth rates than more developed markets, presenting opportunities for investment from potential individuals and buyers. 

Characteristics of an Emerging Market:

• High GDP (Gross Domestic Product) growth: Countries with an emerging market tend to experience higher levels of GDP growth and industrial growth compared to other already developed economies. This constant increase is due to multiple reasons, including industrialisation, foreign direct investment (FDI) and even technological advancements.

• Market Volatility: Although they experience exponential growth, these markets often experience instability due to external price movements and sudden fluctuations in exchange rates. This makes these markets seem like a potential risk for individuals to invest in due to constant changes occurring.

• Improvements in infrastructure: Many of the current emerging markets have been active in improving transportation, energy usage and technology, in aid of supporting economic growth and needs of the people.

• Improving the middle class: As economic factors such as employment and available jobs increase, it leads to higher incomes for individuals, leading to greater consumer spending on goods and services.

Examples of Countries with an Emerging Market:

1. Brazil 

2. Argentina 

3. China 

4. Indonesia

What is the role of emerging markets globally?

• Driving global economic growth: Due to emerging markets having rapid industrialisation and urbanisation, these markets are essential in contributing to the global GDP, influencing global trade and investment across the world.

• Providing investment opportunities: As emerging markets have higher expected growth than developed markets, they often attract FDI and portfolio purchases, which can offer high returns on investment (ROI).

• Supplying raw materials: Countries like Brazil and Indonesia are rich in natural resources, such as minerals and agriculture, which are essential for global trade throughout supply chains for other countries to import.

• Offering cheap labour for countries: In many countries with emerging markets, there are global manufacturing hubs which operate by having low labour costs and a skilled workforce availability. This has been evident in places like China, which is being used to manufacture iPhones for the US company Apple.

• Influencing economic policies: Many countries in emerging markets are a part of imperative trade agreements, such as BRICS and ASEAN. These economic blocs influence global trade and financial markets.