Emerging-mkt demand key driver for global growth: CreditSuisse

NEW DELHI: Emerging markets such as India and China, supported by robust domestic demand, are expected to be key drivers of global economic progress when the recovery from the current financial crisis eventually sets in, says a report by financial services major Credit Suisse.

"Looking forward to eventual recovery from the current crisis, we think domestic-led growth in emerging markets is set to succeed debt-fuelled US private consumption as the most important driver of global economic growth over the coming years," Credit Suisse said in its global investor report.

The report pointed out that consumption in BRIC (Brazil, Russia, India and China) countries is stronger than in the US and even as they are facing cyclical headwinds, the medium-term outlook is positive.

After a debt-fuelled boom, US private consumption growth is likely to suffer sustained weakness, it added.

"While emerging markets (EM) face headwinds of slower export growth and capital flight, we still expect domestic-led growth to be a key driver in emerging markets over the medium term," Credit Suisse Global Economics Analyst Thomas Herrmann said.

The report providing expert know-how for Credit Suisse investment clients stated that the changing trends are already reflected in a rising share of global gross domestic product (GDP) for today's emerging markets.