A decline in productivity across G20 emerging markets could reduce global output by three times as hard as in 2000, the International Monetary Fund estimates.
The IMF warns that domestic shocks in the group’s developing countries could hit rich-world growth, thereby dealing a major blow to the global economy, incomparable to what was the case 20 years ago.
According to the fund, emerging economies in the G20 are now deeply embedded in the global economy. These markets are increasingly impacting global economic output. Thus, their weak performance could create larger "spillovers" to the rest of the world, which are now comparable to those from advanced economies.
So, G20 emerging markets, which have doubled their share of world trade and foreign direct investment over the past two decades, now play a vital role in the economic performance of their neighbors.
