Russia Overtakes China in BofAML Ranking of Top Emerging Markets

When it comes to fundamentals in emerging markets, China is on a downward slide, while Russia is making a comeback. South Africa and Turkey have already hit the bottom.

That’s according to Bank of America Merrill Lynch’s latest ranking of developing-nation economies based on financial stability scores for everything from growth and inflation to fiscal vulnerability. Russia overtook China for the first time since the ranking began in 2009, to sit closely behind South Korea in second place.

“China remains in the top five on GDP growth but has lost ground in terms of private and public debt indicators, the current account and reserve adequacy,” David Hauner, a strategist at the bank, said in an e-mailed note. Russia’s “growth is poor, but current-account, fiscal and leverage indicators remain among the strongest.”

Russia is climbing back up the rankings after its economy suffered amid a slide in oil prices last year. South Africa retained its place at the bottom of the list due to “stagflation, twin deficits and high debt across sectors,” while Turkey’s external vulnerabilities put it second last.

Here’s the full list: