Emerging economies will continue to be the engine of global economic growth

McKinsey, an international consulting firm, releases a report stating that emerging economies will continue to be the engines of global economic growth

Recently, the international consulting firm McKinsey&Company released a report titled "Outstanding performers: high growth emerging economies and the companies driving them", stating that in the long run, emerging economies will continue to be the engine of global economic growth.

The McKinsey Global Institute studied the per capita GDP growth of 71 emerging economies over a 50 year period starting from 1965 and found that 18 economies performed outstandingly. The report states that if all emerging economies perform similarly to these economies, the global economy will receive a boost of $11 trillion.

The report believes that the outstanding performance of these economies is the engine that helps one billion people escape extreme poverty. From 1990 to 2013, the number of people living in extreme poverty in 71 emerging economies decreased from 1.84 billion to 766 million, with outstanding economies accounting for nearly 95% of the population. In addition, an increasing number of residents in these countries have seen a significant increase in income and joined the consumer class. From a global perspective, these highly urbanized consumers have become a powerful driving force for global economic growth. Over the past 20 years, nearly half of the growth in household spending in all emerging economies has been attributed to economies that have performed exceptionally well.

The report analysis states that two major factors have led to excellent performance in some emerging economies: firstly, emerging economies have adopted policies that promote growth in productivity, income, and demand, which have driven economic growth; Secondly, large enterprises in these emerging economies have played a very prominent role.

More than two-thirds of the GDP growth in these high-performance economies is attributed to industrialization. Industrialization effectively promotes productivity, and while productivity growth brings about a significant increase in income, it also stimulates consumption, thereby creating more job opportunities. In addition, these economies have the ability to adjust policies to adapt to their own national conditions and constantly changing external conditions, and can achieve macroeconomic stability even in turbulent external environments.

The excellent performance of large enterprises is also an important driving force for economic growth. McKinsey Global Managing Partner Schneider cited research findings that 56% of the revenue of the best emerging market companies comes from new products and services, which is higher than that of companies in developed economies. Measured by the ratio of capital expenditure to depreciation, its investment is almost twice that of developed economy enterprises. On average, they make important investment decisions 6 to 8 weeks faster than their counterparts in developed economies and can achieve higher returns.

The latest forecast released by the International Monetary Fund also believes that despite recent external environmental factors such as rising oil prices and geopolitical conflicts, emerging economies and developing countries will continue to maintain growth. Gian Maria Milesi Fereti, Deputy Director of the Research Department of the International Monetary Fund, told our reporter that the global economy is experiencing widespread growth, and emerging economies and developing countries in Asia will maintain strong economic performance, especially China, which still plays a very important role in promoting world economic growth