Fitch Panel: Structural Reform Key to Emerging Markets' Success

NEW YORK--()--The future of the world economy depends on strong structural systems in emerging markets for long-term stability, recounted a panel of experts convened by Fitch Ratings in New York for their annual Why? Forum event.

'Emerging markets are experiencing some short term negative sentiment, but in the long-term, I expect emerging markets to be a very positive story, notwithstanding short-term risks, and critical to our world economy and global capital markets system,' said Paul Taylor, President and CEO Fitch Group.

On Nov. 4, Fitch brought together preeminent experts on emerging markets from diverse political, economic and financial backgrounds to debate the future of emerging markets, including:

--Austan Goolsbee, Professor of Economics, University of Chicago Booth School of Business;

--James McCormack, Global Head of Sovereign Ratings, Fitch Ratings;

--Bill Rhodes, President & CEO of William R. Rhodes Global Advisors;

--Condoleezza Rice, 66th U.S. Secretary of State;

--Nate Silver, Founder, FiveThirtyEight; and

--Fareed Zakaria, Host of CNN's Fareed Zakaria GPS.

The panel, moderated by Zakaria, concluded that emerging markets are not what they used to be in terms of magnets for growth. However, they all have long-term prospects as long as these countries can implement reforms to their structural systems through dynamic economic environments.

Rhodes commented on the growth prospects for several countries and said: 'Mexico is currently laying the base for structural reform for growth, however if you look at a country like Turkey, they need to do more on structural reform for growth, and China should have moved earlier on its two-child policy.'

'While I am a long-time bull on China, the current slow-growth environment is not just a blip, China will have to delicately balance how it manages its policies towards the open markets as it shifts from a manufacturing based growth model to a capital based model,' said Goolsbee.

McCormack noted, 'When it comes to emerging markets, favorable demographics are not enough to sustain growth, an effective macroeconomic policy and system are essential to long-term prosperity.'

In a keynote address, Rice stated, 'there is a sense of disorder in the international system. In the U.S., potential of the people needs to be remobilized in order for the U.S. to help maintain a strong international system in the long-term.'

Fitch research reveals that investors see economic contagion from emerging markets as the top risk to U.S. credit markets for the coming 12 months. Investors saw Brazil and China as the two most likely sources of wider EM contagion, trailed by Russia and Turkey. 'Emerging markets have become increasingly entwined and critical to global economic success. When they struggle, developed economies will only feel the crunch more and more,' added Taylor.

Lastly, Nate Silver gave a lively talk about his views and predictions for the 2016 U.S. election and reiterated that the election outlook remains uncertain.

The third-annual event was held at The Whitney Museum in New York City to debate the why behind emerging markets slow-down and their importance in the future. Previous events held in London and New York discussed Europe's prospects for growth and the U.S.'s position as an economic powerhouse. For more information about why Fitch experts think what think and for recaps from all three events, visit'www.thewhyforum.com'.

Additional information is available at 'www.fitchratings.com'.

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Contacts

Fitch Ratings
Media Relations:
Hannah James, +1 646-582-4947
hannah.james@fitchratings.com
Daniel Noonan, +1 212-908-0706
daniel.noonan@fitchratings.com

Contacts

Fitch Ratings
Media Relations:
Hannah James, +1 646-582-4947
hannah.james@fitchratings.com
Daniel Noonan, +1 212-908-0706
daniel.noonan@fitchratings.com