Emerging market economies are faltering. The IMF’s latest downgrade to global growth projections for this year — the fourth consecutive cut — was entirely driven by a lowering of expectations across emerging Asia, Latin America and the Middle East. Emerging markets are still growing around twice as fast as advanced economies. Yet the expected gap with advanced economies in gross domestic product growth is now almost a full percentage point lower than a year ago, with GDP growth in EMs projected to be the lowest for a decade this year. Several major economies, notably Brazil, Russia and Mexico, are growing more slowly than advanced economies.

Many EM central banks have tried to prop up growth by pre-empting the US Federal Reserve in lowering interest rates during recent months. South Korea, Indonesia and South Africa are among the most recent. This is welcome, but is unlikely to be enough to reinvigorate output. Weak productivity, lack of productive capacity and the slow pace of domestic reforms must also be addressed.

The US-China trade spat has exposed the vulnerabilities of export-orientated economies in many EMs. Global trade growth slumped to a seven-year low of just 0.5 per cent in the first quarter of this year; expectations for 2019 are now less than half the pace recorded two years ago. China’s economy grew at its slowest pace in almost 30 years in the second quarter while Singapore reported its worst quarterly contraction in GDP since 2012. South Korea has downgraded its growth projections thanks to weakness in global trade combined with its own trade friction with Japan.