Emerging market equities would rally by year-end after a short-term volatility caused by the

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European debt crisis, said Citigroup, which expects significant cuts to growth outlook for Emerging Europe countries and South Africa.

Citigroup, in its global emerging markets strategy report, said gross domestic product growth in emerging markets would remain strong at about 5.5 percent-6 percent this year and next.

No central bank in its emerging market coverage would raise interest rates this year, it said in an Oct. 6-dated note.

"Unless, the world is about to relapse into a 2008-9 style recession or the Euro is set to completely collapse, the long-term outlook for emerging markets equities looks positive," Citigroup said.

The brokerage said it expects a "double-dip" recession in the Euro area, but not in the United States, where it expects the economy to bounce back with a growth range of 1.5 percent-2 percent through end of 2012.

Citigroup is "underweight" on Russia, South Africa and Mexico as a result of the global financial turmoil and its impact on local business sentiment.

The brokerage is "overweight" on China, Korea, Malaysia, Turkey and Chile, and upgraded India to "neutral" along with Brazil and Taiwan.

The MSCI Emerging Markets Index , which fell to a 2-year low of $824.39 on Oct. 4, was up 2 percent at $881.95 at 1010 GMT on Friday.