The global economy is constantly changing. As a result, emerging markets play an increasingly important role in the world economy, and smart investors like Kavan Choksi UAE and others are capitalizing on this opportunity. Here are some reasons why you should invest in emerging markets.
For a long time, developed countries have driven the world economy. However, emerging markets are now dominating economic growth. The International Monetary Fund projects that “developing economies will grow by 4.9 percent in 2022 and 2023.” This is much higher than developed countries expected to grow at 3 percent.
Many of these emerging countries are becoming attractive destinations for investment. They also offer higher growth opportunities than developed countries.
Emerging markets offer opportunities that can’t be found in more mature economies. For example, investing in Pakistan is currently very profitable because the economy is growing faster than many other emerging economies. It’s expected to grow at approximately 5.8 percent in 2019, and the country is investing heavily in its infrastructure and renewable energy projects.
Investing in emerging markets can also give your portfolio international diversification. There’s more risk involved than with developed economies, but this extra volatility opens up additional opportunities for investors willing to take a chance and ride out the market swings. Because these emerging economies are still growing, they also present opportunities for future investment growth.
The demographic in emerging markets look very promising. The populations are getting younger, the middle class is growing, and economic trends are moving positively. More than half of the world’s population currently lives in developing countries, and this number is expected to increase in the coming years.
This suggests that future growth for these economies will be robust as more people enter the workforce. This is a boon for investors since they can buy into these economies when they’re still growing and take advantage of all this growth has to offer later on in life.
An emerging economy with a young population is an attractive proposition for any investor.
Rising Middle Class
The middle class is expanding rapidly in emerging markets. Around 64 percent of people living in these countries are now considered part of the middle class, and this number will continue to grow.
This rising economic power has led to increased consumerism, which creates many new opportunities for businesses seeking global exposure. The more disposable income people have, the more they spend. So a market with an expanding middle class isn’t just good for investors, but it’s also beneficial to businesses looking to expand their customer base globally.
Increase in Foreign Investment
Investing opportunities are becoming increasingly available in emerging markets as more foreign businesses are interested in these regions. According to the Financial Times, more than half of foreign direct investment (FDI) went to developing countries in 2017.
Such investments are beneficial because they create jobs, help emerging economies adopt new technologies, and improve infrastructure development. In 2017, for example, China invested $60 billion in Pakistan. This money was used to construct roads and power plants to generate up to 10 gigawatts of electricity.
Emerging markets offer great investment opportunities. They are experiencing rapid economic growth and have a young population. The rising middle class also provides opportunities for businesses. Political stability is another plus for investing in emerging markets.