Finding growth among industrialized nations, such as the U.S. and Western Europe, is very challenging for investors these days. According to the Federal Reserve, U.S. Gross Domestic Product growth is expected to be about 2.8 percent in 2011. The European Central Bank expects GDP growth in that region to be 1.4 percent in 2011 and between 0.4 percent and 2.2 percent in 2012.
Investors may want to consider investing in emerging markets to capture more opportunities for growth. Amid the turmoil of the European sovereign debt crises and the high unemployment in the U.S., companies operating in emerging markets may present opportunities for investors to find growth at a reasonable price.
The emerging market category comprises roughly 40 nations undergoing rapid industrial growth and infrastructure development relative to developed nations. The “BRIC” nations — Brazil, Russia, India and China — are the largest and more recognized countries that fall into this category. This group also includes Taiwan, South Korea, South Africa, Mexico, Israel and a host of others.
While the emerging markets are not completely immune to the global slowdown, their growth rates are still relatively strong. The Brazilian government recently cut their 2011 GDP growth expectations from 4 percent to 3.7 percent. China’s GDP cooled from 11.9 percent growth in 2010 to an expected 9.7 percent growth. India’s growth is expected to be between 7.5 and 8 percent.
According to an April 2011 study by McKinsey & Co., China, India, Brazil, Mexico, Russia, Turkey and Indonesia combined are expected to contribute about 45 percent of global GDP growth in the coming decade.