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In: Finance

How are emerging markets shaping globalization?

How are emerging markets shaping globalization?

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Expert Solution

  • When we talk about Emerging Market, there is no standard definition of 'Emerging Market'. However these markets are broadly understood as 'those countries which have started to grow but have yet to reach a mature stage of development and there is significant potential for economic growth. Just give a few example, China, India, Brazil are few of Emergin Market in the Global Economy
  • Now to understand, the role of Role of Emerging Market in shaping globalization, we will take the example of BRIC nation.
    • BRIC nation include Brazil, Russia, India and China, which always remain in the spot light due to the rates of faster economic and demographic growth in many of those markets – factors that are together fuelling growth in consumer spending
    • According to Euromonitor report, between 2004 and 2013, their economies doubled in size and now collectively account for 21% of global GDP and 53% of emerging market GDP
    • By 2020, they are expected to add a combined US $3.3 trillion to their consumer spending: “a figure that is equivalent to another France and Germany combined;
    • It is anticipated that the BRIC nations and Mexico will be among the world’s largest ten economies by 2020
  • Considering the ongoing growth in the consumption expenditure and consumer growth due to increasing population, MNC's are focussing to expand their business in these Emerging Market
  • Before concluding the topic, as per IMF, the World's 5 Largest Economies (% of G20 GDP, in PPP) in 2010 were U.S. (26.4%), China (18.4%), Japan (7.8%), India (7.2%) and Germany (5.3%). And in 2050, the World's 5 Largest Economies in 2010 will be China (33.2%), U.S. (17.5%), India (15.4%), Brazil (4.3%) and Mexica (3.4%)
    • This justify, the future growth in the GDP level, which highly derived by the Consumption expenditure, uncaptured market and raising population, supported by Investment by Developed Countries

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