What is an emerging market economy?

An emerging market economy is generally considered an economy that's transitioning into a developed market economy. It has rapid GDP growth, growing per capita income, increasing debt and equity markets liquidity, and an established financial system infrastructure. What Countries Are Classified As Emerging Markets?

How are emerging market economies classified?

Emerging market economies are classified in various ways. Levels of income, quality of financial systems, and growth rates are all popular criteria but the exact list of emerging market economies can vary depending on who you ask. The International Monetary Fund (IMF) classifies 20 countries as emerging markets.

What are the characteristics of emerging markets?

Some common characteristics of emerging markets are illustrated below: 1. Market volatility Market volatility stems from political instability, external price movements, and/or supply-demand shocks due to natural calamities. It exposes investors to the risk of fluctuations in exchange rates, as well as market performance. 2.