Introducing "Growth Markets"

A Perspective from Goldman Sachs Asset Management

Jim O’Neill: It is Time to Re-define Emerging Markets

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“A significant transformation of the global economy is well under way. Growth market economies will be the driver of the world economy in the coming decade.”

- Jim O'Neill, Chairman, Goldman Sachs Asset Management

  • Jim O'Neill

    Jim O'Neill

    Chairman, Goldman Sachs Asset Management

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Highlights

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Nearly ten years ago, Jim O’Neill coined the acronym BRICs—standing for Brazil, Russia, India, and China—to represent the four emerging economies with a potentially vast influence on the global economy. In 2005, Goldman Sachs introduced the concept of the “Next 11” (“N-11”) as a simple description to bracket the eleven most populous countries beyond the BRICs and to see if they, collectively or individually, might have BRIC-like potential.

In 2011, most of the positive momentum behind the world economy is being driven by the majority of these 15 countries. To describe many of these countries as “Emerging Markets” no longer seems appropriate.

To better describe some of the world’s most dynamic economies, Goldman Sachs Asset Management (GSAM) has adopted the term “Growth Markets,” believing the traditional labels of “Developed” and “Emerging” countries no longer reflect the fundamental nature of the global economy today.

Growth Markets: At a Glance

  • GSAM describes Growth Markets as any country outside the developed world that is responsible for at least 1% of global GDP.

  • Eight countries currently satisfy this criterion: each of the BRIC countries (Brazil, Russia, India and China), as well as the four largest “Next 11” (N-11) countries: Mexico, Korea, Turkey and Indonesia.

  • These are the economies that are most likely to experience rising productivity coupled with favorable demographics and, therefore, a faster growth rate than the world average going forward.

  • By 2020, the four BRICs economies will be responsible for almost 50% of the increase in global GDP.

  • Other countries could achieve Growth Market status over time. These include other N-11 countries, namely Nigeria and the Philippines, and possibly Egypt.



This material does not constitute research, investment advice or trade recommendations. These views may not represent the views of GSAM’s portfolio management teams, the Global Investment Research (GIR) Department, and/or any other departments/divisions of Goldman Sachs and its affiliates which may differ. This material has been prepared by GSAM and is not a product of GIR.

 

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