Putting Markets in Perspective

Economy: Emerging Markets

PIMCO forecasts healthy real GDP growth of 5.5% for emerging market (EM) economies in 2018.

PMIP Emerging Markets Chart 1

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PMIP Emerging Markets Chart 2

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What it means for investors

Valuations in EM look attractive compared to other parts of the fixed income universe, especially considering the healthy fundamental backdrop. However, a selective approach to asset selection remains critical given current pricing and idiosyncratic risks in EM, especially the potential for an escalation of tariffrelated tensions. For investors willing to be selective and patient, we see many opportunities in EM, particularly in the more liquid currency space where investors can remain more nimble if global market sentiment shifts rapidly.