Emerging markets: Headline growth We expect EM growth of 3.4% in 2023 to resilience meets underlying economic significantly outperform developed-market divergence growth of 0.3%, but we are likely to see notable divergence once again across regions. While Asia The story of emerging markets (EM) in 2022 has will benefit from a cyclical bounce in China and been one of remarkable resilience (Figure I-28a) falling inflation, EM Europe will continue to face despite myriad macroeconomic shocks. Although inflation pressures from uncertain energy supply food and energy prices rose, financial conditions and a weak European growth backdrop. In Latin tightened significantly, and Chinese growth America, growth is likely to disappoint consensus disappointed, EM growth, foreign exchange, and as U.S. growth slows materially in 2023, prompting inflation have not underperformed developed central banks to adjust policy rates down from markets. However, the relative headline resilience very high levels. masks the regional divergence (Figure I-28b). FIGURE I-28 Diverging fortunes for emerging-market economies a. Emerging markets GDP growth will remain b. But we expect significant divergence among resilient relative to developed markets growth regions to continue in 2023 in 2023 . % .% . % .% . % . %
.
%
.% .% .% .% . % .% .% .% .% .% %           Developed markets Emerging markets Developed Emerging Emerging Emerging markets Asia Europe Latin America Note: Vanguard forecasts for 2022 and 2023. Sources: Vanguard calculations, based on data from Thomson Reuters Datastream, as of October 31, 2022. 34