Emerging markets growth lacklustre as Russia contracts: HSBC

HONG KONG - The rate of output growth in global emerging markets picked up slightly in December, but remained subdued overall, according to latest survey data from HSBC and Markit. The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI™ surveys, rose to a three-month high of 51.7, from November’s six-month low of 51.2, but still signalled only a modest rate of expansion.

The EMI averaged 51.4 over 2014 as a whole, the lowest for a calendar year since the series began in late-2005. Data by broad sector showed ongoing subdued rates of growth in both manufacturing and services, although the latter posted the fastest expansion in three months.

The four largest emerging market economies portrayed mixed fortunes in December. China registered further below-par output growth, while India’s tentative recovery continued. Brazil registered a decline in activity for the eighth time in nine months, albeit at a weaker rate, while Russia endured a steepening downturn.

Overall inflationary pressures across emerging markets remained subdued, mainly reflecting falling input and output prices in China. Russia, however, witnessed surging inflationary pressures linked to the weak rouble, with input prices up at the fastest rate in 79 months and output price inflation hitting a series-record high.

New orders and employment in emerging markets both increased in December, but at historically weak rates. The level of outstanding business declined for the sixth month running. www.hsbc.com (ATI).