Investors have been worrying about the health of emerging market economies ever since the U.S. Fed announcement of plans to reduce asset purchases sparked massive capital outflows last year. But has it all been for naught? Greater-than-expected oil consumption in bellwether countries suggests that EM economies are growing just fine. Overall demand for oil in emerging markets grew 2.3 percent in the first quarter of 2014, compared with 1.6 percent and 1.7 percent in the third and fourth quarters of 2013, respectively, according to Credit Suisse. Demand increased an impressive 7 percent year-over-year in Saudi Arabia, 6 percent in Indonesia, and even 3 percent in the EM economic laggard of late, India. Such data, says Credit Suisse, should help solidify sentiment that there’s “no sign of a collective ‘falling-off-the-cliff’ type event that so many investors have fretted about.”
First published in The Financialist in 2014.
JENS ERIK GOULD
Jens Erik Gould is a political, business and entertainment writer and editor who has reported from a dozen countries for media outlets including The New York Times, National Public Radio and Bloomberg News.