Which economies will grow fastest this year?

Life is full of surprises and The Economist’s prediction may fall into that category. Watch this two-minute video outlining their forecast:

It’s easy to fall into the trap of thinking of huge successful economies like China and India, isn’t it. But obviously economies that have not really grown so far are going to be the success stories. Last year The Economist predicted Macau, Mongolia, Libya and The Gambia would be the fastest growing.  And The World Bank’s forecast was Mongolia, Iraq, Democratic Republic of Timor and Sierra Leone.

Developing countries

No matter what forecast, and there are many, they all point to Africa, the Middle East, Asia, Central Asia and Latin America. South Sudan is frequently mentioned and the reason for that is very well explained in the video. Have personally worked with all countries mentioned, apart from South Sudan and Timor.

There is ample scope for growth in all of them and it will be really interesting to see which ones will manage to grow as predicted. The US is currently considering targeted sanctions against South Sudan for its failure of leadership that has brought the country to the brink of civil war. So if South Sudan turns out to be the fastest growing economy in the world or just spiral into civil war is a huge question mark. 

It’s interesting to note that The World Economic Forum actually believe that all areas of the world will have contracting growth this year compared to last.

Do you agree with The Economist about which countries will grow fastest this year? Or are you betting on other countries? Will African countries finally forge ahead? Will Iraq grow this year or be hindered by conflict? Will MENA, excluding conflict zones, be a success story? Will South Sudan grow fast or be hindered by problems in the area? 

Video: The Economist – You Tube

32 responses

  1. As an investor I am always interesting in developing market information. It gives much needed information when making an international investment decision. How do I feel. Some African countries greatly concern me for obvious reasons. So I would be hard pressed to put my money on some of those countries. If some of the middle east countries mentioned could grow out of violence, grow up and get their act together, I think they have a tremendous opportunity. Just my thoughts.
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    • Seems we more or less agree, Susan. There are good and bad opportunities in Africa. Any conflict zone could spell disaster, or huge profits actually. Iraq and Syria are prime examples of such countries. Depends on what kind of an investor you are:-)

  2. Catarina, pundits have been predicting the so-called BRIC countries — Brazil, Russia, India and China — are experiencing the growth to become the world economic leaders. Russia is stumbling and even China is slowing down its torrid growth. But their economies, like the U.S., are huge so even incremental growth is more than the tiny economies of the countries mentioned in the video. It's like saying how great it is to grow 100%, if you're starting from a base of 10. But you can't point to those small countries as the ones to watch in 2014. They are simply too small at this point to matter much in the grand scheme of things.
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    • Exactly Jeannette. But the question is which economies will grow fastest and what you point out is stated in the video. The interesting thing is that many of us get the question wrong:-)

  3. On paper it sounds like they are right. In practice it could be a very different story. Only time will tell us… Seems to me it's difficult to project things like this in those particular regions. I also agree with what Jeanette already said. When you start at basically 0 it's much easier to grow 100%
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    • Cheryl, growth is calculated the way The Economist did. Let's see what happens with the countries they focused on. South Sudan in my opinion is the one that could go fatally wrong.:-)

  4. Interesting and of note is what is driving the growth in a majority of these, which seems to be energy related…oil and gas. Though, as noted in the video, civil unrest could severely cripple the growth in the Sudan. It will be interesting to look back
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  5. I do think that African economies in general – probably excluding South Africa for the time-being – are set to be among the world's fastest-growing ones. While South Sudan is tipped here to be the fastest of all, I am not sure that will happen as the instability there is likely to overtake things. However, in much of the rest of Africa, growth will be very significant.

    I also believe the Middle East countries that could grow quickest (e.g. Iraq) probably won't for reasons of instability, too.

    With the possible exception of Macau, Asia will be seeing slower growth, I think.

  6. Kind of guessed USA would not make any list for growth this year. Of course it would be developing countries, but which one? I don't think South Sudan. Talk about political instability! It makes sense that economies in a position to benefit from other countries needs or pains around the world will have that growth. The ones who can fill those gaps, they are the winners. The Economist studies this kind of thing. It will be interesting to see if their predictions are spot on.
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  7. The predictions really do rely on whether the countries can contain conflict and unrest. The opportunities are certainly there as shown in the video. It would be nice to see them all forge ahead, but that is pretty unlikely.
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  8. Macau and Mongolia seem so exotic but,compared to the Sudan and Africa they considered staid and secure. I don't have the kind of investment money to consider any of these for investment purposes but it will be interesting to see how it plays out.

  9. I always learn something when I visit your post Catarina. I doubt I would have guessed any of those countries, largely because I tend to think of economic growth in the context of the big players. It makes perfect sense that it's not them.

    I have been hearing about the potential of Africa for my whole life and while I am optimistic, I will believe it when I see it.
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    • Glad you do, Debra. Personally learnt from this post as well since i think of growth the way you do. Or rather used to think that way:-) African countries are bound to grow, how can they not with such a low base. But will it make a difference for the people?

  10. As you know, economics isn't something I tend to think about. However, at least your blog keeps me apprised more so than I would be otherwise 😉
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  11. That is very interesting, I cannot discuss about it, because I am not in this subject, but I think if some country put its money in the economy of a developing country, then the economy of the second country will grow, for sure, if there aren't any other side issues.
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  12. The so-called developing countries have a shot in the global economy and given where they're coming from, it's not surprising that they are showing the largest year to year growth percentages. But, the bottom line for places like Iraq, South Sudan and Sierra Leone is whether they have the will to control the corruption that usually comes along with the potential for financial success AND the prognosis for civil war in each. I'm not at all encouraged about Iraq and am probably too ignorant to comment on the others. I'm currently visiting southeast Asia (I'm writing this in Siem Reap, Cambodia) — in case you need an example of auto-genocide.
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  13. Glad you agree with me about Africa. China already is the growth engine of the world economy and has gone far beyond the point of being the fastest growing economy. They are two different issues:-)

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