Cycle of Crisis Looms Over Emerging Markets

Emerging markets have performed amazingly well over the last seven years. In many cases, they have far outperformed the advanced industrialised countries in terms of economic growth, debt-to-GDP ratios, counter-cyclical fiscal policy, and assessments by ratings agencies and financial markets. As 2012 begins, however, investors are wondering if emerging markets may be due for a correction, triggered by a new wave of "risk off"' behaviour.