Emerging Markets Hot Spots 2019



 
Hot Spots Map

 
Sizzling: Watch out for dramatic growth and intense investor interest
 
Hot: Conditions are right for healthy growth
 
Warm: Opportunity, but with significant downsides
 
Tepid: Only for the brave, but pioneers will find plenty of opportunity
 
Cold: The risks outweigh the potential rewards

Dare To Be Great

Emerging-market economies are mainstays of global growth, with solid prospects for continuing to raise their citizens’ quality of life.

Whether it is true that every great challenge offers great opportunity, emerging markets were certainly handed plenty of both over the past several months. Between global trade tensions and homegrown problems, 2018 proved to be an especially transformative year for many economies. Currency concerns, declining commodity prices and dwindling investor confidence only added to the turbulence.

Hardships, however, helped bring out the peculiar—often unsung—strengths of these nations, proving once again that developing markets are not all created equal. Near-term constraints and negative sentiment about stock markets have, in many cases, obscured their solid macroeconomic fundamentals and longer-term prospects. The road to prosperity isn’t a straight line, and emerging markets remain poised for a continued expansion that will generate much of the world’s growth in the years ahead.

Owing to increasing affluence in emerging countries, mostly in Asia, the Brookings Institution says that 2018 also marked a global tipping point: For the first time in human history, the majority of the world (about 3.8 billion people) can now be considered “middle class”—that is, spending at least $11 per person, per day, in 2011 purchasing power parity. By 2025, developing-economy consumption is expected to reach $30 trillion annually—about half of the global total—up from $12 trillion in 2010.

Asia is leading the way. One unintended consequence of the US-China dispute was a diversion of trade and manufacturing investment to ASEAN economies—with Vietnam, Thailand, Cambodia, Indonesia and Malaysia standing to benefit the most as multinational corporations rethink their supply chains. China tried to weather the worst of the storm by carrying out economic reforms likely to power growth and competitiveness for years to come. India’s economy, pressured by a decline in the rupee and exports, is now forecast to pick up in 2019 and remains one of the fastest-growing nations in the world.

In the meantime, most of Latin America continued on its road to recovery, helped by high growth rates in Peru, Chile, Colombia and Paraguay and by the relative easing of political uncertainty in Brazil and Mexico. Emerging and developing Europe, although impacted by the currency crisis in Turkey and an overall economic deceleration in the eurozone, was buoyed by the vigorous performance of Central and Eastern nations.

The IMF expects growth in the Middle East and North Africa, constrained in part by weak oil output and geopolitical tensions, to nevertheless reach 2.4% GDP growth in 2019 before recovering to about 3% in 2020. A deterioration in business conditions in South Africa showed how its neighboring nations have become more insulated from risks of contagion: This year, one-third of sub-Saharan economies will post growth above 5%, claiming the title of world’s secondfastest growing region in the period leading to 2020.

Global Finance’s country-by-country ranking highlights the most dynamic investment destinations based on their economic stability, quality of governance and business regulations. Our color-coded map divides these countries into five groups according to their overall attractiveness. In addition, we include a wealth of supporting data—and succinct pros and cons—for each emerging market expected to excel in 2019.

Click here to see the top 10 lists    Strategizing in an Environment of Instant Everything

Country GDP Growth Forecast 2019 (%) % Change in FDI 2016-2017 Competitiveness Score 2018-2019 Corruption Perceptions Score 2018 Ease of Doing Business Rank 2019
Europe
Albania 3.72 2 58.1 36 63
Bosnia and Herzegovina 3.5 40 54.2 38 89
Bulgaria 3.1 -10 63.6 42 59
Croatia 2.6 20 60.1 48 58
Georgia 4.78 16 60.9 58 6
Hungary 3.3 143 64.3 46 53
Moldova 3.8 154 55.5 33 47
Montenegro 2.51 141 59.6 45 50
Poland 3.51 -54 68.2 60 33
Romania 3.43 3 63.5 47 52
Russia 1.8 -32 65.6 28 31
Serbia 3.5 22 60.9 39 48
Turkey 0.37 -16 61.6 41 43
Ukraine 2.74 -33 57.0 32 71
Latin America
Argentina -1.62 264 57.5 40 119
Brazil 2.37 8 59.5 35 109
Chile 3.41 -40 70.3 67 56
Colombia 3.59 5 61.6 36 65
Costa Rica 3.3 18 62.1 56 67
Dominican Republic 4.98 48 57.4 30 102
Ecuador 0.73 -20 55.8 34 123
El Salvador 2.3 128 52.8 35 85
Guatemala 3.43 -3 53.4 27 98
Haiti 2.5 257 36.5 20 182
Honduras 3.6 4 52.5 29 121
Jamaica 1.48 -4 57.9 44 75
Mexico 2.52 0 64.6 28 54
Nicaragua -1 0 51.5 25 132
Panama 6.8 2 61.0 37 79
Paraguay 4.16 11 53.4 29 113
Peru 4.12 -1 61.3 35 68
Uruguay 3.2 83 62.7 70 95
Venezuela -5 -106 43.2 18 188
Asia-Pacific
Armenia 4.8 -27 59.9 35 41
Azerbaijan 3.62 -36 60.0 25 25
Bangladesh 7.1 -8 52.1 26 176
Brunei 5.06 69 61.4 63 55
Cambodia 6.78 12 50.2 20 138
China 6.18 2 72.6 39 46
India 7.44 -10 62.0 41 77
Indonesia 5.12 488 64.9 38 73
Kazakhstan 3.13 -43 61.8 31 28
Kyrgyzstan 4.53 -85 53.0 29 70
Lao PDR 7.01 -18 49.3 29 154
Malaysia 4.6 -16 74.4 47 15
Mongolia 6.3 136 52.7 37 74
Nepal 5.04 87 50.8 31 110
Pakistan 4.01 13 51.1 33 136
Philippines 6.63 38 62.1 36 124
Sri Lanka 4.3 53 56.0 38 100
Tajikistan 5 -36 52.2 25 126
Thailand 3.86 269 67.5 36 27
Vietnam 6.5 12 58.1 33 69
Middle East
Bahrain 2.59 113 63.6 36 62
Iran -3.61 49 54.9 28 128
Jordan 2.5 7 59.3 49 104
Kuwait 4.06 -28 62.1 41 97
Lebanon 1.4 1 57.7 28 142
Oman 5.05 11 64.4 52 78
Qatar 2.82 27 71.0 62 83
Saudi Arabia 2.43 -81 67.5 49 92
United Arab Emirates 3.66 8 73.4 70 11
Africa
Algeria 2.71 -26 53.8 35 157
Angola 3.05 -155 37.1 19 173
Benin 6.34 40 44.4 40 153
Botswana 3.61 210 54.5 61 86
Burundi 0.42 470 37.5 17 168
Cameroon 4.4 1 45.1 25 166
Chad 3.6 37 35.5 19 181
Egypt 5.46 -9 53.6 35 120
Ethiopia 8.49 -10 44.5 34 159
Gambia 5.4 416 45.5 37 149
Ghana 7.6 -7 51.3 41 114
Guinea 5.93 -64 43.2 28 152
Kenya 6.13 71 53.7 27 61
Lesotho 1.22 2 42.3 41 106
Liberia 4.51 -45 40.5 32 174
Malawi 4.7 -15 42.4 32 111
Mali 4.83 -25 43.6 32 145
Mauritania 5.24 22 40.8 27 148
Mauritius 4.01 -16 63.7 51 20
Morocco 3.17 23 58.5 43 60
Mozambique 4 -26 39.8 23 135
Namibia 3.08 15 52.7 53 107
Nigeria 2.26 -21 47.5 27 146
Rwanda 7.8 7 50.9 56 29
Senegal 6.72 13 49.0 45 141
Sierra Leone 5.55 306 38.8 30 163
South Africa 1.4 -41 60.8 43 82
Swaziland 0.44 -748 45.3 38 117
Tanzania 6.6 -14 47.2 36 144
Tunisia 2.9 -1 55.6 43 80
Uganda 6.11 12 46.8 26 127
Zambia 4.48 65 46.1 35 87
Zimbabwe 4.2 -22 42.6 22 155

Sources:
IMF, World Economic Outlook (WEO), October 2018
UNCTAD, World Investment Report, June 2018
WORLD ECONOMIC FORUM, Global Competitiveness Report, 2018
TRANSPARENCY INTERNATIONAL, Corruption Perceptions Index, 2018
WORLD BANK, Doing Business Report, 2019.

Top 10 Performers for Each Economic Metric

GDP Growth Forecast 2019 (%)
Ethiopia 8.49
Rwanda 7.80
Ghana 7.60
India 7.44
Bangladesh 7.10
Lao PDR 7.01
Panama 6.80
Cambodia 6.78
Senegal 6.72
Philippines 6.63
 
% Change in FDI 2016-2017
Indonesia 488
Burundi 470
Gambia 416
Sierra Leone 306
Thailand 269
Argentina 264
Haiti 257
Botswana 210
Brunei 181
Moldova 154
 
Competitiveness Score 2018-2019
Malaysia 74.4
United Arab Emirates 73.4
China 72.6
Qatar 71.0
Chile 70.3
Poland 68.2
Saudi Arabia 67.5
Thailand 67.5
Russia 65.6
Indonesia 64.9
 
Corruption Perceptions Score 2018
United Arab Emirates 70
Uruguay 70
Chile 67
Brunei 63
Qatar 62
Botswana 61
Poland 60
Georgia 58
Costa Rica 56
Rwanda 56
 
Ease of Doing Business Rank 2019
Georgia 6
United Arab Emirates 11
Malaysia 15
Mauritius 20
Azerbaijan 25
Thailand 27
Kazakhstan 28
Rwanda 29
Russia 31
Poland 33

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