The World Bank Sees More Growth From Emerging Markets

Despite all the negativity facing the U.S. and Europe, The World Bank sees increased growth in the emerging world. The organization has increased its growth forecasts for the group of nations. The bank predicts developing countries will grow at 6.3% in 2011, compared to its 6% January forecast. Contrasted with the developed world, which saw a cut, from 2.4% to 2.2%. Lead author of the report, Andrew Burns, was quoted as saying that “The financial crisis for most developing countries is over. Efforts must now focus on returning monetary policy to a more neutral stance and rebuilding the fiscal cushions that allowed developing countries to respond to the crisis with counter-cyclical policies.” The growth forecast also highlighted the continued problems with emerging market inflation, especially in the poorer nations. Food and fuel costs remain high and have the potential to derail growth in the short term. For investors, the recent market pull-back may be the perfect time to re-up on emerging market stocks. The iShares MSCI Emerging Markets Index

is the largest ETF in the sector, while the PowerShares FTSE RAFI Emerging Markets

offers a unique weighting methodology that may add some spice to an EM investment.