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Emerging markets set to lead global economic recovery, says HSBC index

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HSBC has launched a survey of emerging markets economic data, the HSBC Emerging Markets Index, which suggests emerging markets are likely to lead the global economic recovery.

Compiled with data from over 5,000 purchasing managers from companies in 13 countries, the HSBC EMI is an indicator of the economic and business health of the world’s emerging and fast growing markets.

The index shows that emerging markets output in Q3 recorded a robust rise and that forward indicators point to further improvement in Q4.

Stephen Green, group chairman of HSBC Holdings, says: “As the world’s economic centre of gravity shifts from West to East, the economic strength of emerging markets will play an increasingly central role in the development of financial markets and international relations. The HSBC Emerging Markets Index provides a unique snapshot of the economic heartbeat of emerging markets.”

The HSBC EMI surged from 50.7 in Q2 to 55.3 in Q3, signalling the strongest quarterly increase in emerging market manufacturing and service output since Q2 of last year.

The index has rebounded sharply from an all-time low of 43.8 recorded in the final quarter of last year and 44.3 in Q1.

Any reading below 50 indicates a contraction of output during the quarter while readings above 50 signal expansion.

Stephen King, HSBC’s chief economist, says: "Although the US remains the most important trading partner for many emerging nations, its relative importance is declining. We now expect emerging nations to see economic growth of 6.0 per cent next year while the developed world will expand by only 1.8 per cent."

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