Rob Starr, Big4.com Staff Reporter 

 The most recent Rapid-Growth Markets Forecast (RGMF), shows those markets will continue to contribute nearly half of the world’s growth over the next three years. There are several noteworthy benchmarks here including the fact that rising trade links will continue to support foreign direct investment (FDI) from Asia and Latin America to Africa and other RGMs, an emerging Asia with rising middle class will lead the growth for all RGMs and demand in metal from China and other Asia-Pacific economies will push prices high.

FDI inflows have been an important driver of growth in RGM countries over the past few years. With RGMs set to grow much faster than the developed world in the coming years, rising economic and trade links within RGM countries will see a continued flow of FDI from Asia and Latin America to Africa and other RGMs, improving infrastructure and technology across these markets.

However, the BRIC economies remain some of the most important destinations with FDI inflows to China and Brazil, in the first six months of 2011, at US$111b and US$32b respectively also proving that FDI inflows have held up remarkably well despite turmoil in financial markets.

The slowing in growth across the RGMs reflects several factors including the Eurozone crisis which will remain the most damaging until it is resolved. The business impact of an escalation of the crisis would be particularly serious for RGM exporters who are exposed to significantly weaker demand from Europe.

RGMF also observed a reversal in portfolio flows since July 2011 as investors became increasingly risk averse. Threats to liquidity and lending by European banks with a wide global reach are particularly disquieting for RGMs. Banks are selling assets and cutting back on loans under pressure to strengthen their capital which is weakening financial flows into and within RGMs with potentially depressive impacts not only on business operations but also business investment.

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