“There is mounting evidence that emerging-market economies just aren’t expanding as fast as people expected.
Chinese data in recent days showed exports rose only 1% in May from the year earlier, the slowest pace in 10 months, weighed down by poor demand from customers in Europe. Brazil and India are both suffering from slowdowns that have confounded policy makers and taken the shine off what had been among the most promising big economies in the world.
South Africa’s central bank warned last week that growth this year would likely fall short of its already tepid forecast for gross domestic product to expand 2.4%. Thailand’s central-bank governor said on Monday that the bank would soon lower its forecast for 5.1% growth this year.
Dimming growth expectations have also prompted a number of interest-rate cuts to prop up economies in South Korea, India and Thailand, Turkey and Israel.
India’s economy is among the hardest hit by the recent reversal in capital flows. The country’s slow growth—less than 5% annually in the past two quarters compared with nearly 10% a few years ago—and the weak rupee have made a fragile economy more vulnerable.”
The full article is available here Money Flows Out of Emerging Markets – WSJ.com.