Explained: Emerging Markets

Explained: Emerging Markets

The emerging market is surely one of the most sturdy and impactful terms in the world. Companies scheme global amplification strategies with reference to it. Many multilateral organizations utilize it to apprehend and analyze the social trends. The emerging markets favors in structuring the chief growth opportunity in the advancing world economic order. An immense stir has been noted in multinational corporations due to the potential of emerging markets. Before the further apprehension let’s understand the meaning of emerging markets.

Meaning of Emerging Markets

what is emerging markets

Emerging markets are also called developing countries and emerging economies as well. These are the countries that invest in higher prolific and productive capacity. These economies are initiating effective steps to move away from the traditional sort of economy that depends upon farming, agriculture and trading raw material etc. Leaders and chiefs of the developing countries make efforts to construct an eminent and better standard of life for the people concerned to their economy. Impactful efforts are being made from their side such as rapid industrialization and adoption of mixed economy. In simpler terms emerging market can be defined as a country on the way to become a developed nation with help of several socio-economic factors and determination.

Characteristics of Emerging Markets

Emerging markets tend to excel because of a number of prime characteristics. The chief characteristics of emerging markets can be summarized as follows:

  • Rapid change – Rapid change is quite crucial characteristic of an emerging market. The chiefs of emerging countries are required to remain in power in order to support their people in the economy. That is why they are able to take on the swift change to a beyond industrialized economy. The economic development and growth of the highly developed countries namely The United StatesUK, Germany and Japan etc. was less than three percent in the year 2015 whereas the growth in Turkey, UAE and Egypt was more than four percent.
  • Highly unpredictable – This characteristic of emerging market tends to mark its presence due to three factors such as natural disaster, instability of domestic policies and external price shocks. For instance the traditional economies which are highly dependent on agriculture for economic growth are under the risk of these above three factors. Natural calamities such as earthquakes, Tsunamis, drought can destroy the crops which results in lower profit rate. Emerging markets share the risk of currency swings and commodity swings because they have less power to combat such issues.
  • Immature Capital Markets – The emerging markets require growth and expansion. The capital markets in these types of economies are quite immature as compared to that of developed markets.

List of Emerging Markets

As per the Emerging Market Index there are 23 countries listed which are Brazil, Chile, China, Colombia, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Qatar, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates. This index tends to trail the market capitalization of each and every company tabled on the stock markets of these countries. Countries like Argentina, Jordan, Kuwait, Singapore, Vietnam etc. are also being listed as emerging markets by other sources. India and China are the main stalwarts in the list of emerging markets.


Emerging markets countries are expanding swiftly. Numerous emerging economies will outstrip the progressive economies and move forward to top the rank in terms of the largest and powerful economies. China, India and Brazil are among top ten large emerging markets measured by GDP. These countries can surely stay ahead of the developed and advanced economies. Emerging economies still face lots of challenges and troubles to obtain sustainable growth. The major key factor that can help these emerging markets to grow more powerful is to initiate the cooperation with each other.

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