Dec 19, 2013 (LBO) – Emerging markets are seeing the end of almost a decade of good times as the lack of new reforms to spur economic activity takes its toll, a top international economist said. Developing economies continued to grow following the end of a global financial crisis, bringing continuing high growth, Razeen Sally, a visiting professor at the Lee Kuan Yew School said in Colombo.
“Basically 10 good years have come to the end,” he told an LBR-LBO Debrief forum on the economic outlook for 2014.
Sally said a ‘commodity super cycle’ was also ending.
African and South American countries that had benefitted from a commodity boom may see slower growth.
In many emerging countries, a lot of problems that were hidden during the good time were now showing up.
“Governments did not take significant reforms because the incentives were not there,” Sally said.
“Now growth is coming down, water lines are receding, the detritus is starting to show.”
Growth in Asia has been driven by loose money which has resulted in high levels of debt, he said.
In China growth has been led by high levels of investments. That model was no longer giving results and over-invest