The Ever-Emerging Markets

Why Economic Forecasts Fail

Gao Xiqing, the president of China Investment Corporation smiles as he holds a mallet to hit the ceremonial gong during his visit to the Karachi's Stock Exchange, December 2012. Akhtar Soomro / Courtesy Reuters

In the middle of the last decade, the average growth rate in emerging markets hit over seven percent a year for the first time ever, and forecasters raced to hype the implications. China would soon surpass the United States as an economic power, they said, and India, with its vast population, or Vietnam, with its own spin on authoritarian capitalism, would be the next China. Searching for the political fallout, pundits predicted that Beijing would soon lead the new and rising bloc of the BRICs -- Brazil, Russia, India, and China -- to ultimate supremacy over the fading powers of the West. Suddenly, the race to coin the next hot acronym was on, and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) emerged from the MIST (Mexico, Indonesia, South Korea, and Turkey).

Today, more than five years after the financial crisis of 2008, much of that euphoria and all those

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