The World Bank's International Finance Group announced yesterday that it expects 2006 to be a record-breaking year for emerging markets. Several factors contribute to the rosy expectations:
1. Emerging market economies are growing at twice the rate of advanced economies;
2. Poverty levels are decreasing in emerging market countries;
3. Every $1 in aid to emerging economies results in approximately $4 in private investment;
4. Domestic capital markets are deepening in these economies;
5. The market capitalization in emerging markets has more than doubled in the past decade; and
6. Trading in local currency bonds has increased.
Not surprisingly, the two leading countries in this category are China and India.