Dr. Nouriel Roubini is so famous for his gloomy forecasts that he’s often called “Dr. Doom” — so why is he so bullish about emerging markets?
In a recent interview in USA Today, Roubini called emerging markets a “long-term story.”
“Their growth rate in the long run is 6%,” he said, “while in advanced economies (including the U.S.) it’s 2%, 2.5%. So if you are willing to invest for the long run, yes on emerging markets.”
While Roubini is long term bullish on emerging markets, he is short term bearish on many countries – and the entire continent of Europe.
“Europe is in a recession in the periphery countries,” Roubini said, “and it’s getting worse. There is a double-dip recession in the United Kingdom, sluggish growth in Japan, and the data from many emerging markets are also suggesting a slowdown in China, Russia, Brazil, India and places like Turkey, Mexico and South Africa.”
Roubini: ‘perfect storm’ coming for global economy in 2013
The IMF projects 3.5% global economic growth for 2012, with only 2.1% growth in the United States. The Euro area is expected to contract by -0.3%, although France and Germany will grow slightly. Emerging and developing economies (DEM, quote) will see 5.7% economic growth for 2012, down from 6.2% in 2011 and 7.5% in 2010.
The IMF expects China (FXI, quote) to expand the most in 2012 at 8.2%, with India (EPI, quote) next at 6.9%. From this, the region of developing Asia will lead the world with a 7.3% growth rate for 2012.