DUBAI: Emerging markets played a big role in holding up global economic growth during the last five years in the face of a global recession and the sovereign crisis in Europe.

The major high growth emerging economies are buckling under pressures ranging from domestic economic compulsions and geopolitics.

A property slump in China is pushing down the nation’s annual growth to what analysts project is the slowest pace since 1990. While Brazil is trying to escape the recession it entered in the first half of the year, Russian economy is seen paying a heavy price as it faces West’s sanctions.

The IMF has forecast China’s GDP growth will slow further to 7.1 per cent next year citing a probable tightening of credit and ongoing weakness in the property market. The figures came after the World Bank cut its own forecasts to 7.4 per cent for 2014 and 7.2 per cent in 2015. China is a key driver of the global economy and in recent decades it enjoyed many years of double-digit growth, the boom propelling it up world financial tables. But now the government and analysts say China’s economy needs to be rebalanced away from an emphasis on exports and over-reliance on state-backed investment projects, towards internal demand. The transformation is expected to result in slower but more sustainable growth.

China’s consumer inflation slowed more than expected last month to a near five-year low, adding to concerns that global growth is cooling fast unless governments take bolder measures to shore up economies.

While much of the decline was due to falling prices for food, fuel and other commodities, which are benefiting consumers globally, the data also pointed to broad weakness in the second-largest economy.

China’s transition from debt-fuelled growth to a more sustainable model less dependent on investment in housing and infrastructure is not proving easy — and growth is slowing sharply.

Facing mounting risks to growth and rising risks of deflation, Beijing is widely expected to continue rolling out a steady stream of stimulus measures in coming months, although most economists believe it will hold off on more aggressive action, such as an interest-rate cut, unless conditions sharply deteriorate.

“Policymakers in Beijing should begin to be concerned that global disinflationary pressures are spreading to China,” Dariusz Kowalczyk, the senior economist at Credit Agricole CIB.

“The low inflation readings will open the door to further targeted monetary and fiscal easing. There is also less need for a strong currency to offset imported inflation.”

Geopolitical tensions from the Ukraine conflict are amply visible in the outlook for Russia and its neighbourhood. According to the IMF, Russia’s already battered economy will struggle to recover from the fallout of the crisis in Ukraine as uncertainty looks set to drag down growth around the former Soviet Union.

The US and EU have slapped the toughest sanctions on Moscow since the Cold War over its support for a separatist uprising in east Ukraine, prompting Moscow to retaliate with embargoes on a wide range of food products from the West.

Massive capital flight from the country is expected to reach some $100 billion (Dh367 billion) in 2014 and to remain high over the next year, the IMF has estimated.

The turmoil has seen the rouble lose a fifth of its value against the dollar since the start of the year, with the national currency last week briefly plummeting through the psychologically important mark of 40 to the dollar to reach an all-time low.

Meanwhile inflation has soared to over 8 per cent and looks set to remain elevated in 2015.

“Even without further escalation, prolonged uncertainty could erode confidence, accelerate capital outflows, put pressure on the exchange rate, and further weaken investment and growth, with the adverse spillovers to the rest of the CIS via lower imports, remittances, and foreign direct investment,” the IMF said.

In Latin America, Brazil is facing sluggish economic expansion and a dramatic slump in investor confidence which threaten to impair a decade of economic and social gains. According to Global rating agency Moody’s, active state intervention in the economy is one of the factors hurting investment. “The country’s diverging fiscal and monetary policies and the upcoming election have fuelled even more uncertainty among investors, which will weigh further on the banks’ ability to generate capital,” said Ceres Lisboa an analyst with Moody’s.

Analysts say emerging markets in general, with the possible exception of India, seem to be entering a new phase of prolonged lower growth, with Russia perhaps trapped in years of stagnation.

Unlike Brazil, Russia or South Africa, India is expected to gain from the global slowdown and oil price decline. Oil accounts for more than half of India’s imports. Any decline in oil price is almost immediately reflected in India’s current account and budgeted expenditure. The current account deficit falls by about $1bn a year for every $1 decline in the price of a barrel of oil.

“We have grown more confident in our call that Fed tapering and rising rate-hike expectations will stabilise global commodity prices, and reduce inflation. After all, the pass-through to domestic oil prices should be complete by June, even if oil settles at our house forecast of $108/bbl,” said Indranil Sen Gupta, an economist with Bank of America Merrill Lynch.

India’s annual consumer price inflation fell to 6.5 per cent in September on the back of softer food prices, with wholesale inflation hitting a five-year low of 2.4 per cent. Lower inflation should lead in turn to a decline in interest rates that would boost domestic investment, according to Deutsche Bank.