The Lurking Threat of Deflation
Emerging markets could put a brake on growth worldwide
This article is for subscribers only.
Twenty years ago, flat or slow growth in emerging-market economies would have made only a small dent in the expansion of the world’s gross domestic product. But now developing nations make up 40 percent of global GDP. For these countries, the coming year looks like a period of weak growth because of lower prices for commodities, a slowdown in global trade, and sliding exchange rates. Bruce Kasman, chief economist at JPMorgan Chase, sees a risk that their problems could unleash a “disinflationary impulse through the global economy.”