Will the Contagion for the Next Financial Crisis Come From Emerging Markets? | Mercer 2019

Will the Contagion for the Next Financial Crisis Come From Emerging Markets? | Mercer

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Will the Contagion for the Next Financial Crisis Come From Emerging Markets?
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Calendar11 July 2019

Is the next global financial crisis just around the corner? If so, will it be markedly different from the last crisis? And is there a possibility the contagion will come from today's emerging markets, such as China, Turkey or Argentina?

While the future is uncertain and uncontrollable, you can take calculated steps as a business leader to prepare now for what may come later.

Emerging Market Economies Are on the Rise

The strength of emerging market economies was one of several top concerns for leaders in 2018, according to the Mercer Global Talent Trends study, and it continues to be a concern today. While Asia, Latin America and Africa steadily replace the North-Atlantic-centric economies as the world's engines of growth, the global economy is experiencing increasing impacts due to their growing strength.

Ardavan Mobasheri, managing director and chief investment officer at ACIMA Private Wealth, believes the global leadership baton will have been completely passed to the faster-growing economies by 2030. He states, "By the end of the third decade of the century, the transition will likely be complete, with the anchors of global economic growth cast across the Pacific and the Southern Hemisphere."

But as the world adjusts to the growing strength of emerging market economies, it must also adapt to those economies' inevitable speed bumps.

"Speed Bumps" Are Starting to Form Globally

Emerging market assets are now retreating in the face of increasing headwinds across their geographies, including production slowdown, rising debt, higher inflation rates and slides in currencies.

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