The emerging markets market capitalization will surpass that of the United States by the end of the decade, as incomes rise and investors have greater access to public exchanges around the world, according to goldman sachs group inc.
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The entity’s analysts, Tadas Gedminas and Kevin Daly, among others, they developed the economic growth projections into market capitalization estimates, and concluded that the global share of the US will fall from 42% in 2022 to around 35% in 2030.
In the same period, the share of emerging markets will eliminate from 27% to 35%, and continue to grow from there.
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While real GDP growth has slowed in developed and emerging economies in recent years, income convergence has continued despite various shocks to the global economy, such as the global financial crisis and covid-19 pandemic.
“The most important dynamics underlying emerging markets capital market growth in our projections is the liquidation of corporate assets, the deepening of capital markets, and disintermediation, which takes place as financial development progresses.” I said Goldman Sachs.
Likewise, developing economies are expected to grow at an average rate of 3.8%, more than double the 1.8% expected for advanced nations, due to more favorable demographics and increased productivity during the rest of the year. the decade
“This does not have a clear implication for stock performance per se (…) That being said, our economists expect emerging market stocks to outperform developed market stocks over the long term, due to higher earnings growth over the long term. term and the expansion of valuation multiples, as risk premiums fall”, the document states.
The forecasts for the future
Goldman Sachs India is expected to rise the most in global market capitalization, from less than 3% in 2022 to 8% in 2050. China would grow from 10% to 15%, surpassing the US as the world’s largest economy towards 2035. In 2050 the largest economies will be China, the US and India.