Emerging economies to create multipolar world
Global monetary system will no longer be dominated by a single currency: World Bank
WASHINGTON—Emerging markets are going to re-shape the financial world as we know it, according to a new report from the World Bank.
The report says that by 2025, more than half of all global growth will come from Brazil, China, India, Indonesia, South Korea and Russia.
These markets will expand on average by 4.7 per cent, driving growth in lower income economies through cross-border activity such as trade, migration, and technological transfer.
“Emerging market multinationals are becoming a force in reshaping global industry…international financial institutions need to adapt fast to keep up,” says Justin Yifu Lin, the World Bank’s chief economist and senior vice president for development economics.
Industry too should be prepared for the shift in economic power and its implications on corporate financing, investment, and cross-border deals.
“The most likely global currency scenario in 2025 will be a multi-currency one centered around the dollar, the euro, and the renminbi,” says Mansoor Dailami, lead author of the report and manager of emerging trends at the World Bank.
He added the challenges of managing global integration calls for stronger policy coordination across economies.
The report found that while advanced economies will grow at a slower rate of 2.3 per cent, they will continue to play a big role in the global economy.