Don't trust decoupling theory, says Pioneer CIO

“For the emerging economies, food and energy inflation is a real problem,” he said. “They have subsidised oil and demand hasn’t slowed, but it’s becoming so expensive for them: India is spending 4.5% of its GDP on oil subsidies and it can’t afford any more.” He pointed out that for emerging economies, where incomes are generally lower than in the West, food and energy make up a far greater proportion of individual expenditure. “In India, food is more than 50% of the total basket of consumption, so more expensive food leaves less money for other things. I think we will see a lot of disappoi...