Emerging markets are on the rise, with all 24 projected to grow in 2025 according to the International Monetary Fund (IMF). This expansion creates a supportive backdrop for companies in these regions and presents an opportunity for investors.
Leading the charge are economies like India (6.5%), the Philippines (6.2%), Saudi Arabia (6.0%), and Indonesia (5.1%). The emerging markets are spread across Asia, Europe, Latin America, and the Middle East, and are outpacing traditional powerhouses like the US and UK, which are forecasted to grow at just 1.5% and 1.9%, respectively.
Emerging Markets Real GDP growth forecasts 2025
Real GDP, or gross domestic product, is a measure of a country’s economic health. It reflects the total output within a nation’s borders and is adjusted for inflation, offering a more accurate picture of economic performance. Strong real GDP growth often signals rising employment and increased consumer spending, making it an important headline indicator for investors.
Emerging markets benefit from many favourable trends such as growing populations, rising consumer demand, and young, tech-savvy populations. Many are at the vanguard of an incredible period of global change - home to some of the world’s most innovative and exciting corporations that are harnessing technology. Whether it is in e-commerce, semiconductors, fintech, big data, artificial intelligence (AI) or gaming, several emerging market-based companies have become leaders in global innovation.
Additionally, several of the countries are rich in natural resources and also lead the green revolution, with over 80% of global solar panel production in China, for example*
Forecasting the future of global economies is challenging. It's important to recognise that data from the International Monetary Fund (IMF) represents predictions, not guarantees of returns, which could vary. However, emerging markets are currently driving 65% of global growth** and the charts show how they are expected to continue outpacing more developed nations and the global average in the years ahead.
Given this forecast, it’s worth considering whether your portfolio is positioned to capitalise on the potential opportunities in these rapidly growing markets. Are you ready to benefit from this growth potential?
Real GDP Growth Forecasts (%)
Source: IMF World Economic Outlook, April 2024
Investing in emerging markets is easy with TEMIT, the UK’s first emerging markets investment trust. It offers you a professionally managed portfolio of 60-80 companies in these high-growth regions. With a track record spanning over 35 years and over £2 billion in assets, TEMIT provides a straightforward way to invest in the potential of emerging markets.
* IEA (2022), Solar PV Global Supply Chains, IEA, Paris https://www.iea.org/reports/solar-pv-global-supply-chains, Licence: CC BY 4.0
** IMF World Economic Outlook, October 2023.
Shares in TEMIT qualify as an investment which can be held through an ISA. TEMIT is available through a stocks and shares ISA from a number of different companies. Your financial adviser will be able to give you full details of the options available to you.
What Are the Risks?
All investments involve risks, including the possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments.
Investments in emerging markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity. To the extent a strategy focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a strategy that invests in a wider variety of countries, regions, industries, sectors or investments. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks.
References to particular industries, sectors or companies are for general information and are not necessarily indicative of a fund’s holding at any one time.
For illustrative/discussion purposes only. It is not a recommendation to purchase, sell or hold any particular security. It is neither indicative of any portfolio holdings at any one time nor reflective of current or future portfolio holdings. Past performance is not necessarily indicative nor a guarantee of future performance.
