Will Emerging Markets Growth Slow in 2011?

Economists polled by Thompson/Reuters have reportedly slashed their estimates of GDP for the second half of 2011, and the year of 2012 for a number of emerging market (NYSE:EEM) nations, according to a recent article. The poll targeted countries China (NYSE:FXI), India (INF), and “a handful of other economies in the region” though excluded Japan (NYSE:EWJ).

Despite the projected slowdown, economic growth among regional leaders should hover around 8%, though concerns exist that rising inflation rates may negate much of those gains. According to one Credit Suisse (NYSE:CS) analyst, “The bigger risks confronting the Chinese (NYSE:FXI) and Indian (INF) economies at present stem more from domestic than international developments. In particular, the presence of high and sticky inflation has forced the central banks of both countries to tighten policy, with potential adverse consequences for domestic activity.”

Credit Suisse, “among the most bearish” of those polled, predicted 8.7% GDP growth for China (NYSE:FXI) in 2011, and 8.5% for 2012. The median estimate was 9.3% in 2011 and 8.8% in 2012. For India (INF) the mean revised estimate for 2011 GDP was cut to 7.9%, down from 8.3%, but inflation forecasts were also cut vastly, from 8.5% to 6.5%, meaning a larger net gain for the Indian economy this year. South Korea (NYSE:EWY) also had its 2011 outlook downgraded, from 4.5% to 4.2%, due to a “sluggish” export market. Australia (NYSE:EWA) received the steepest forecast downgrade of any nation in the poll, with analysts cutting the 2011 GDP target down-under from 2.9% to 2.1%. On a brighter note, growth is expected to pick up in Australia next year, with the mean 2012 GDP forecast targeting a gain of 4.3% due to strong investment in mining and natural resources industries.