Which emerging markets will be the winners and losers from energy transition?

The implications for investors are clear. Those EM that face a substantial loss of fossil fuel export revenues will have to adapt their economies and public finances to the new, low carbon economy, or face economic and market stress. A permanent improvement in the balance of payments of EM that are net importers of fossil fuels should be supportive of currencies and structurally lower interest rates in the long term. But the biggest opportunities for investors will probably be found in those EM that export much sought-after commodities in the new world, which should boost return prospects across the board.

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.