The emerging market renaissance has taken a tumble at the start of the fourth quarter – but GDP growth still remains above 4.5%.
Data from the Institute of International Finance (IIF) shows that emerging markets ex-China industrial production contracted for the first time in October since March.
In China, industrial production slowed to a five-month low of 5.9%.
However, according to the IIF, financial indicators rose in October following three consecutive months of decline. Emerging market equities and industrial metals improved slightly, while the region’s foreign exchange markets were flat and oil prices dipped.
Oil impacted emerging markets in Europe, Middle East and Africa and the IIF estimates that this caused growth to reduce by 0.2 percentage points to 2.6%
Latin America declined for the first time since May, sliding from 1.6% to 1.5% in October. This was due to a drop in industrial production in Brazil although the impact was cushioned by better trading data from Argentina and Mexico.
Weaker trading data in Asia also brought the region’s growth rate down by 0.2 percentage points last month to 6.5%. However, the IIF said indicators suggested a soft landing for the Chinese economy.
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