*Hisham Mahmoud from London
Although the estimates of its performance in 2018 vary, analysts forecast growth in emerging economies next year to rise by about 9 percent.
Emerging economies have suffered a host of external factors that have affected their overall performance, but to varying degrees.
The trade tensions between the United States and China, the growing strength of the US dollar, instability of oil prices, and high interest rates have all had a very negative impact on the performance of emerging markets this year.
Although these factors are expected to continue to have an impact on the global economy as a whole, and emerging economies in particular.
However, that may change next year, not as a result of the disappearance of these factors or their disappearance from the economic scene, but because central banks in emerging markets and economic authorities will have greater predictability of these factors and thus have the potential to formulate more effective economic, trade and financial policies to absorb the negative reactions resulting from the change of these economic data.
Changes in dollar exchange rates and interest rate fluctuations, which are the most influential workers in the economic landscape in emerging markets next year, will remain in the view of many experts.
Ray Jo, head of foreign exchange at the Bank of England, said to the Economist, "Most estimates suggest that dollar exchange rates will be more resilient next year, with a more bearish trend. This will relieve pressure on emerging economies with current account deficits, as it would also ease the pressures on those economies as a result of the rising bill for foreign debt servicing of foreign currency and this will provide a greater margin of economic maneuvering for emerging markets."
In short, the expected resilience of the US currency in 2019 will be positively reflected on the economic conditions in emerging markets, but that flexibility has negative consequences on economic interactions in emerging markets as well.
The dollar's decline is a real challenge for the emerging economies to maintain their attractiveness as investment wells.
It also places its export capacity in a declining position, while growing its desire to import from abroad, with the balance of interest in favor of local currencies against the US dollar.
This view is further reinforced by the hints suggested by US Federal Reserve Chairman, Jerome Powell, who stated that the "Fed" may look to the freezing of interest rates for some time, and those hints have an influential effect on the path that could be taken by emerging economies next year if emerging market currencies hit their highest level in four months after those hints.
James Daniel, investment expert, said to the Economist that the rise in interest rates in the United States and the European Union has left a very negative impact on emerging economies, as it increased the attractiveness of investment in major economies.
The attractiveness of emerging economies has weakened and now the landscape may change if interest rates are stable in developed countries.
The impact of the dollar and interest rates on the path that emerging economies will take next year does not deny the importance of other factors may be the trade dispute between the United States and China in the forefront.
The trade war between the two largest economies in the world undoubtedly leave an impact on global demand for primary or semi-manufactured products produced by many emerging economies.
The trade war between Beijing and Washington led to a decline in Chinese demand for many products from developing and emerging countries, as their incomes shrank, and their demand declined in turn from the United States and China.
But efforts to defuse the trade crisis, which was evident at the G-20 summit, has rekindled optimism among emerging market leaders that their export capacity could be restored, thus improving the performance of local stock exchanges.
These feelings reinforce the current stability in the oil markets and lower prices through easing the pressure on financial reserves and allowing the national economy a higher degree of freedom of movement.
Of course, this analysis paints a future outlook for emerging markets next year on the basis of the impact of "external factors," but another group of experts is convinced that "internal factors" will have the final say in the course of emerging economies.
While a number of specialists' fear that a major group of these markets will witness an escalation in internal political differences, which prompt investors to refrain from investing in them.
Others believe that the fiscal policy adopted by central banks and their flexibility will be the main determinant of economic growth in emerging markets next year.
Dr. Ethan David, a professor of international economics, stressed to wait when assessing the expected performance of emerging economies next year.
He said to the Economist, "The existence of real problems for emerging economies next year is a realistic hypothesis, but the growth rate of these economies is expected to reach 9 percent by the end of next year, as a large part of the growth is due to the improved performance of the stock market, and currencies compared to the current year and expected that these markets are the place for quick profits."
He added, "But we must also keep in mind that Asian equities will outperform their counterparts in Latin America and that the Argentine peso and the Turkish lira will continue to be as difficult as they were this year."
Experts believe that three emerging markets will take the lead next year, India, Brazil and Thailand.
These expectations reinforce strong budgets, domestic growth and government support policies in those countries, but these expectations remain dependent on the stability of their internal political situation.
