Emerging Markets Hot Spots 2020


 
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

Early Morning in Emerging Markets

Despite the pandemic setback, it is emerging economies that hold the greatest promise for new growth.


Just a few months ago, the IMF was forecasting positive per capita income growth in 2020 for over 160 of its member countries. Now the expectation is that more than 170 will have negative per capita income growth, with low-income nations particularly at risk.

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 perform better in 2020.

It might seem almost unfitting to celebrate the strength and the many achievements of the world’s emerging nations in the midst of one of the worst crises in modern history. In retrospect, the trade clashes and global geopolitical tensions that have been the hallmark of the past year seem almost trivial in comparison to the frightening pandemic brought about by the spread of the Covid-19 coronavirus. However, experts now agree that those disputes—along with the deterioration of trust—left us weakened and unable to mount a coordinated response. If anything, we have been reminded of how much we depend on each other.

Yet, it would be also inaccurate to look back and look ahead and see only adversities in lieu of the determination and resilience these enormous challenges have brought to light. Despite all the trials and hardships, emerging markets have never stopped on their path to sustainable development and prosperity. Faced with one threat after another, they have often intervened more promptly and resolutely than their most developed counterparts to protect their hard-won gains. These efforts have not gone to waste. In the most optimistic view, the recession will be short-lived, and after this painful pause we will hit the start button again. Others reject this interpretation and maintain that the recovery will take years. In either case, today most developing countries are stronger, richer and more competitive than they have ever been in modern times—and better positioned to withstand and bounce back from a crisis of this magnitude.

Long-term prospects for the emerging markets have not changed. Home to more than 80% of the world’s working-age citizens, developing economies became the main driver of global growth at the beginning of the past decade. While their level of productivity will be impacted for the near future, their economic foundations will stand. Population growth, mass urbanization and rising disposable incomes—all sustained trends that overcome temporary setbacks—will propel these countries increasingly to the forefront of the economic and political stage. By 2050 up to six of what are currently known as emerging nations could be among the seven largest economies in the world, according to projections by PwC and others. Long before then, the G7 will have started bearing little or no resemblance to its current composition. The pace of change will be dizzying; and as other small and big crises will inevitably arise and continue to highlight vulnerabilities, vulnerabilities will continue to promote change. It is always darkest before dawn

Country GDP Growth Forecast 2020 (%) % Change in FDI 2017-2018 Competitiveness Score 2019-2020 Corruption Perceptions Score 2019 Ease of Doing Business Rank 2020
Europe
Albania -5.006 13 67.6 35 67.7
Bosnia and Herzegovina -5 4 54.7 36 65.4
Bulgaria -4 -21 64.9 43 72.0
Croatia -9.024 -43 61.9 47 73.6
Georgia -3.999 -35 60.6 56 63.7
Hungary -3.1 96 65.1 44 73.4
Moldova -3 39 56.7 32 74.4
Montenegro -8.976 -12 60.8 45 73.8
Poland -4.579 25 68.9 58 76.4
Romania -5 9 64.4 44 73.3
Russia -5.466 -49 66.7 28 78.2
Serbia -3.016 44 60.9 39 75.7
Turkey -4.998 13 62.1 39 76.8
Ukraine -7.731 -9 57.0 30 70.2
Latin America
Argentina -5.719 6 57.2 45 59
Brazil -5.303 -9 60.9 35 59.1
Chile -4.486 4 70.5 67 72.6
Colombia -2.386 -20 62.7 37 70.1
Costa Rica -3.292 -22 62.0 56 69.2
Dominican Republic -0.965 -29 58.3 28 60
Ecuador -6.271 127 55.7 38 57.7
El Salvador 5.44 -6 52.6 34 65.3
Guatemala -1.963 4 53.5 26 56.3
Haiti -4 -72 36.3 18 40.7
Honduras -2.35 3 52.7 26 56.3
Jamaica -5.605 -13 58.3 43 69.7
Mexico -6.63 -2 64.9 29 72.4
Nicaragua -6 -53 51.5 22 54.4
Panama -2.05 21 61.6 36 66.6
Paraguay -1 0 53.6 28 59.1
Peru -4.534 -9 61.7 36 68.7
Uruguay -3 31 63.5 71 61.5
Venezuela -15 15.06 41.8 16 30.2
Asia-Pacific
Armenia -1.479 2 61.3 42 74.5
Azerbaijan -2.184 -51 62.7 30 76.7
Bangladesh 2.019 68 52.1 26 45
Brunei 1.297 10 62.8 60 70.1
Cambodia -1.587 11 52.1 20 53.8
China 1.181 4 73.9 41 77.9
India 1.871 6 61.4 41 71
Indonesia 0.499 7 64.6 40 69.6
Kazakhstan -2.53 -18 62.9 34 79.6
Kyrgyzstan -4.044 144 54 30 67.8
Lao PDR 0.723 -17 50.1 29 50.8
Malaysia -1.7 -14 74.6 53 81.5
Mongolia -1 45 52.6 35 67.8
Nepal 2.509 24 51.6 34 63.2
Pakistan -1.547 -27 51.4 32 61
Philippines 0.648 -26 61.9 34 62.8
Sri Lanka -0.536 17 57.1 38 61.8
Tajikistan 1 17 52.4 25 61.3
Thailand -6.662 62 68.1 36 80.1
Vietnam 2.7 10 61.5 37 69.8
Middle East
Bahrain -3.59 6 65.4 42 76
Iran -5.985 -31 53 26 58.5
Jordan -3.735 -53 60.9 48 69
Kuwait -1.108 -1 65.1 40 67.4
Lebanon -12.019 14 56.3 28 54.3
Oman -2.844 44 63.6 52 70
Qatar -4.345 -322 72.9 62 68.7
Saudi Arabia -2.283 126 70 53 71.6
United Arab Emirates -3.492 0 75 71 80.9
Africa
Algeria -5.157 22 56.3 35 48.6
Angola -1.374 23 38.1 26 41.3
Benin 4.519 4 45.8 41 52.4
Botswana -5.379 29 55.5 61 66.2
Burundi 5.542 211 40.3 19 46.8
Cameroon -1.215 -14 46.0 25 46.1
Chad -0.158 98 35.1 25 36.9
Egypt 1.952 -8 54.5 18 60.1
Ethiopia 3.237 -18 44.4 37 48
Gambia 2.5 64 45.9 37 50.3
Ghana 7.6 -7 51.3 41 114
Guinea 2.92 -16 46.1 29 494
Kenya 1.01 27 54.1 18 73.2
Lesotho -5.208 -9 42.9 40 49.4
Liberia -2.501 -51 40.5 28 43.2
Malawi 1 13 43.7 31 60.9
Mali 1.532 -35 43.6 29 52.9
Mauritania -1.986 -88 40.9 28 51.1
Mauritius -6.8 -16 64.3 52 81.5
Morocco -3.74 36 60.0 41 73.4
Mozambique 2.2 18 38.1 26 55
Namibia -2.484 -58 54.5 52 61.4
Nigeria -3.41 -43 48.3 32 56.9
Rwanda 3.5 12 52.8 53 76.5
Senegal 2.992 7 49.7 45 59.3
Sierra Leone -2.314 365 38.8 33 47.5
South Africa -5.801 166 62.4 33 67
Swaziland (Eswatini) -0.941 1454100 46.4 16 59.5
Tanzania 2.013 18 48.2 37 54.5
Tunisia -4.276 18 56.4 43 68.7
Uganda 3.52 67 48.9 28 60
Zambia -3.507 -49 46.5 34 66.9
Zimbabwe -7.383 113 44.2 24 54.5

Sources:
IMF, World Economic Outlook (WEO), April 2020
UNCTAD, World Investment Report, June 2019
WORLD ECONOMIC FORUM, Global Competitiveness Report, 2019 (for all countries) and 2018 (for Liberia and Sierra Leone)
TRANSPARENCY INTERNATIONAL, Corruption Perceptions Index, 2019
WORLD BANK, Doing Business Report, 2020


Top 10 Performers for Each Economic Metric

GDP Growth Forecast 2020 (%)
Benin 4.52
Uganda 3.52
Rwanda 3.50
Ethiopia 3.24
Senegal 2.99
Guinea 2.92
Vietnam 2.70
Nepal 2.51
Gambia 2.50
Mozambique 2.20
 
% Change in FDI 2017-2018
Venezuela 1505.90
Sierra Leone 364.76
Burundi 210.85
South Africa 165.79
Swaziland (Eswatini) 145.41
Kyrgyzstan 143.84
Ecuador 126.54
Saudi Arabia 126.13
Zimbabwe 113.11
Chad 97.68
 
Competitiveness Score 2019-2020
United Arab Emirates 75.0
Malaysia 74.6
China 73.9
Qatar 72.9
Chile 70.5
Saudi Arabia 70.0
Poland 68.9
Thailand 68.1
Russia 66.7
Britain 65.4
 
Corruption Perceptions Score 2019
Uruguay 71
United Arab Emirates 71
Chile 67
Qatar 62
Botswana 61
Brunei 60
Poland 58
Georgia 56
Costa Rica 56
Malaysia 53
 
Ease of Doing Business Rank 2020
Georgia 83.7
Malaysia 81.5
Mauritius 81.5
United Arab Emirates 80.9
Thailand 80.1
Kazakhstan 76.9
Russia 78.2
China 77.9
Turkey 76.8
Azerbaijan 76.7

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