One of the leading experts on emerging markets, Franklin Templeton executive chairman Mark Mobius, has predicted that emerging markets and the so-called BRIC (Brazil, Russia, India, and China) economies will continue to be substantial drivers for investment returns.
Commenting on the adverse markets of 2008 and the outlook for 2009, Mobius said he expected emerging markets would continue to display relatively strong fundamental characteristics and record faster growth rates than their developed counterparts.
He said while inflation was a major concern in 2008, a correction in commodity prices had eased fuel and food prices in many economies, allowing inflation to subside in the latter part of the year.
"This has enabled emerging market countries to not worry about higher inflation but take measures to stimulate growth by lowering interest rates and taking other fiscal measures," Mobius said. "Thus, the longer-term outlook for emerging markets remains positive."
Looking at commodities, Mobius said while commodity stocks had been hurt by the recent decline in commodity prices, many companies were still profitable at current price levels.
"Commodity prices have come down from their peaks, but we do not foresee prices [going] down to extremely low levels in the near future; indeed, we believe commodities will trend upwards over the long term," he said. "This is, in part, because of continued demand from emerging markets (despite slower economic growth) and relatively inelastic supply."