Economic worry shifts to emerging markets at Russian G20 meet

Long hailed as the hungry new tigers of the global economy, the world’s biggest emerging markets will be the chief economic focus at the G20 summit in Russia this week as their once surging prospects suddenly dim.

Brazil, Russia, India, China and South Africa -- grouped in the informal BRICS bloc seen as an alternative economic powerhouse -- all go into the meeting experiencing slowing growth and embattled currencies.

While the dispute between Russia and the West over the conflict in Syria is likely to overshadow the summit in Saint Petersburg, splits between emerging markets and US over its winding down of stimulus could prove equally fraught. ‘The biggest concern is going to be slow growth. There has been some slowdown in almost all developing countries and we need to discuss sources of long term growth,’ said Russia’s leading official, or sherpa, for the G20 meeting, Ksenia Yudaeva.

There has been deep concern in BRICS economies over the plans by the US Federal Reserve to wind down its programme of quantitative easing (QE) which helped their economies expand fast in the last few years. The US stimulus freed up money that investors then ploughed into emerging markets. But now risks that this liquidity may recede is triggering major outflows and sharply depreciating BRICS currencies.