The wildfire spread of the omicron variant adds a new element of uncertainty to the global economy. But when it comes to emerging markets, the consensus view is that these countries’ prospects remain bright. J.P. Morgan Global Research expects their collective GDP to grow by 4.6% this year, faster than its 2015-2019 trend. S&P Global Ratings is even more bullish, projecting that emerging economies will expand by 4.8%.
Strikingly, these growth figures are virtually identical to the forecasts for 2022 released by the International Monetary Fund in October 2019 — that is, before the pandemic. It has become a popular trope that COVID changes everything — or, rather, everything except the outlook for emerging markets.
In fact, there are multiple reasons for worrying that this consensus is too rosy.