They're back.
Fears of a "hard landing" in China, much discussed in the recent past, have once again flared, with famed NYU economist Nouriel Roubini arguing the BRICS will feel the brunt.
The often-irate prognosticator took to The Guardian's website on Tuesday to describe the threat and explain six reasons why many emerging-market economies, once among the fastest growing in the world, have suddenly turned sour.
"First, most emerging-market economies were overheating in 2010 [and 2011], with growth above potential and inflation rising and exceeding targets," he began. "Many of them thus tightened monetary policy in 2011, with consequences for growth in 2012 that have carried over into this year."
Second, he notes, the idea that emerging-market economies could "fully decouple from economic weakness in advanced economies was far-fetched."
He added that recession in the Eurozone, near recession in the United Kingdom and Japan in 2011 and 2012, as well as slow economic growth in the United States were always likely to hurt emerging-market performance.
"Third, most BRICS and a few other emerging markets have moved toward a variant of state capitalism. This implies a slowdown in reforms that increase the private sector's productivity and economic share, together with a greater economic role for state-owned enterprises (and for state-owned banks in the allocation of credit and savings), as well as resource nationalism, trade protectionism, import-substitution industrialization policies, and imposition of capital controls."
