In two-thirds of the emerging economies that we track, consumer price pressures are increasing, with year-over-year inflation reaching 6.5% or higher. At the same time, real economic activity is softening, as seen in the weakening trend in imports, retail sales, industrial production, and purchasing managers’ indexes.
China has been the notable exception to the rule. The country’s distinct stage in the business cycle can in good part be explained by its unorthodox approach to handling the pandemic. Following weeks of economically damaging lockdowns, China has man-aged to bring the latest omicron wave under control. Inflation remains subdued, and reopening tailwinds and fiscal stimulus are allowing economic growth to recover from very low levels.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.