Asia-Pacific News

Emerging Markets Boom 'Harming' Developed Economies: Expert

Geraldine Tan|News Assistant, CNBC Asia Pacific

The growth in the emerging markets is starting to harm advanced economies, Frederic Neumann, MD & co-head of Asian economics research at HSBC, told CNBC on Thursday.

He said the booming emerging markets is driving commodity prices higher, which will hamper growth in developed nations.

EM's Growth Harming Developed Markets: Analyst

"(That is) leading them to leave interest rates lower for longer and that continues to fuel the bubble in the emerging market world, particularly in Asia," Neumann added.

The low interest rate environment and weak market performance have also resulted in Western investors transferring funds to emerging markets, fuelling their growth and demand for basic resources.

"In Asia, the headline growth numbers that are coming through are starting to benefit the average guy on the street," observed Neumann.

But the global growth imbalance will put pressure on Western consumers.

"Emerging market consumers will pull ahead and really provide the growth driver for the rest of the world but ... that is providing headwinds to the consumer in the U.S. and Europe," said Neumann.

And that "will slow down the rate of growth in these particular markets," he concluded.