What are "emerging markets"?

Emerging markets are characterized by economies that are experiencing rapid growth and industrialization. These economies are typically in the process of transitioning from low income to medium or high income, often marked by significant enhancements in infrastructure, increased market opportunities, and a growing consumer base. They usually feature improving economic stability, which attracts foreign investment and leads to increased international trade.

This context allows emerging markets to capture the interest of investors who seek higher potential returns compared to established markets. The potential for rapid economic expansion is often coupled with a rising middle class, improved productivity, and the development of financial markets.

In contrast, stagnant growth is not indicative of emerging markets, since their defining characteristics include growth and development. Political unrest might affect emerging markets, but it does not define what they are. Lastly, focusing solely on local trade undermines the concept of emerging markets, which are increasingly integrating into the global economy through international trade and investment. Thus, recognizing the vibrant economic potential of these regions is crucial to understanding their role in the global market.