Emerging markets brace for global slowdown
From Asia to Latin America, emerging economies are preparing for for a global slowdown, indicating deep concern about the developed world as well as new-found room for maneuver at home, AFP reported.
Those who can, do.
While central banks in the United States, Europe and Japan are forced to look for ever more arcane ways to prop up their ailing economies, emerging markets are doing it the old-fashioned way.
On Tuesday Indonesia's central bank became the latest country to unexpectedly cut interest rates in order to stimulate growth, following a similar move by Brazil.
Mexico is expected to follow with a similar rate cut -- an option not open to many developed economies which already have interest rates near zero.
"Whether we like it or not, the global economic slowdown is affecting developing countries," Bank Indonesia Governor Darmin Nasution said announcing the move.
Behind his comment, and others like it, is a candid acknowledgement of the enduring role US, European and Japanese demand plays in Asia and Latin America, and a new-found freedom from fears of inflation.
Three years ago when panic swept across the United States and Europe, many emerging markets appeared cautious but confident that decades of crises-by-osmosis would not be repeated.
Many emerging economies, the argument went, were now healthy enough to avoid catching a cold when the United State or Europe sneezed.
But last month the International Monetary Fund sought to scotch this view as irrational exuberance.