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McKinsey: Developed Countries to Lead; Not Emerging

That's the message being sent out based on McKinsey's latest executive survey and the first thing that comes to mind for me, is FX money flow.  Here are a few excerpts:

Global executives are increasingly positive about the direction of the world economy, though in our latest survey on economic conditions, the source of their optimism has shifted away from emerging markets and toward the developed world. For the first time since we posed the question 18 months ago, respondents say they no longer expect developing markets to lead global economic growth over the next decade. Instead, they expect developed markets—and an improving Europe in particular—to advance future growth.

Executives in emerging markets were cautious in June. Now, amid continued reports of slowing growth, volatile currency movements, and sociopolitical instability, they are particularly gloomy over the state of their home economies.  In fact  41% say economic conditions in their countries are worse now than they were six months ago, compared with just 13 percent of their peers in developed economies.

Not surprisingly, given the ongoing crises in Egypt and Syria, executives see geopolitical instability as a rising risk to growth, both global and domestic. The share of executives who cite geopolitical instability as a risk to global growth in the coming year rose to 69 percent in the current survey, up from 51 percent in June.

Read all survey results at McKinsey.com

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