Weekly Economics Analysis by Lloyds TSB

Whilst the focus in global financial markets is, rightly, on when the recession will end, and on speculating on whether the proliferating signs of economic recovery are sustainable or not, there is another less observable trend that has not been changed by the recession: this is the higher share of global economic output taken by the emerging markets. Chart a highlights this trend.

Recession cannot disguise ongoing shift in global economy

Whilst the focus in global financial markets is, rightly, on when the recession will end, and on speculating on whether the proliferating signs of economic recovery are sustainable or not, there is another less observable trend that has not been changed by the recession: this is the higher share of global economic output taken by the emerging markets. Chart a highlights this trend. We have calculated the share of world economic output accounted for by the top ten developed economies (ranked according to their share of gdp) over the last 28 years and compared that group with the top ten emerging economies, also ranked by gdp. The results are clear: the share of the developed economies has fallen sharply, whilst the share of the emerging economies has, not surprisingly, risen equally sharply.

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