The emerging market growth slowed to its weakest level in two years in the second quarter reflecting global economic fragility, the consequences of Japanese tsunami and impact of recent inflation, said a report. Price pressures eased sharply against a backdrop of continued monetary tightening by central banks across the emerging world in response to menacing inflationary pressures, according to the SABB HSBC Emerging Markets Index (EMI). The EMI is a quarterly economic index developed and published in Saudi Arabia by HSBC Group and SABB. The Q2 signaled the most acute easing of input cost inflation for two-and-a-half years, the report added. The SABB HSBC EMI dipped to 54.2, down from 55 in the first quarter and edging below the long-run series average of 54.8. The moderation in overall activity growth reflected a weaker increase in manufacturing production, with the pace of expansion easing to the slowest in three quarters. Meanwhile, service providers recorded a slightly faster rise in business activity, albeit one that was the second-slowest since the second quarter of 2009. The rates of production growth eased across the majority of manufacturing sectors monitored by the survey, with S. Africa and Singapore the two exceptions.
