The World's Fastest Growing Economies
While global economic growth has shifted into a lower gear over the last 12 months, and is seen remaining subdued over the coming years as the Chinese economy matures, some countries will defiantly buck this trend. With the help of our panelists in the December edition of the FocusEconomics Consensus Forecast, we take a look at the economies that are projected to grow at the fastest rate between 2019 and 2024.
1. Rwanda: 7.7%
Rwanda’s economy has come a long way since the genocide of the early 1990s, which ripped apart the country’s economic, political and social fabric. Nominal GDP has risen from USD 2 billion in 2000 to USD 9 billion in 2018, and our panelists see real growth averaging 7.7% out to 2024—the fastest reading of all the 131 economies covered by FocusEconomics.
According to Jacques Nel, chief economist at Oxford Economics: “Effective governance has been key in Rwanda’s success, with accountable political and inclusive economic institutions creating an environment conducive to private sector development. The reform-minded government has decided to play more of a supporting role in the economy’s development, putting policies in place that promote entrepreneurial activities and that attract foreign investment. This has resulted in widespread development, with growth and foreign investment not only restricted to a few sectors.”
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2. Bangladesh: 7.5%
Bangladesh has benefited in recent years from rapid growth in low-cost garment manufacturing and solid remittance inflows, factors which should continue to support momentum moving forward. Moreover, the country is blessed with favorable demographics; past success at reducing fertility rates has seen the dependency ratio—the ratio of the working-age population to the population not in the labor force—plummet. Our panelists forecast average growth of 7.5% over the next few years.
According to the Asian Development Bank, growth will be supported by “continued buoyant exports underpinned by trade redirection in response to tensions between the US and the PRC, robust private consumption expenditure with higher remittances, accommodative policy on private sector credit, ongoing reform to improve the cost of doing business including the establishment of a one-stop service for private investment, and stepped up budget spending, especially to develop infrastructure”.
3. Senegal: 7.3%
Senegal has been one of Sub-Saharan Africa’s star performers in recent years, successfully diversifying the economy away from its dependency on a single cash crop—peanuts. Prospects over the coming years are rosy, with average growth of 7.3% projected by our panelists. In particular, new energy facilities in 2022 and the government’s long-term economic plan—the Plan Senegal Emergent (PSE)—should buttress activity.
According to a recent report published by the World Bank: “Implementation of the second phase of PSE is expected to significantly boost private investment (including in the oil and gas sectors) and increase the productive capacity. Moreover, the cumulative effect of past reforms would sustain export growth. Services would remain the main contributor to GDP, while agriculture would be the most dynamic sector.”
4. Ethiopia: 7.0%
A country once synonymous with devastating famine, Ethiopia is now part of Sub-Saharan Africa’s economic vanguard. The country has adopted a state-led growth model focused on boosting the manufacturing sector, establishing a series of industrial parks and investing heavily in road and rail infrastructure. Ethiopia has also been a recipient of a huge amount of Chinese funding, particularly for construction projects, which has also fueled concerns of debt sustainability. The panel expects growth to average 7.0% between 2019 and 2024.
According to Angela Bouzanis, lead economist at FocusEconomics, economic growth is seen “remaining strong thanks to infrastructure and development spending, as well as progress on opening up the economy”.
5. Myanmar: 6.8%
Myanmar's economy has benefited in recent years from economic liberalization and increasing integration into the global economy, a trend which should continue going forward. Moreover, economic momentum will benefit from favorable demographics and a strategic location at the heart of the world’s most dynamic economic region.
According to Jan Lammerson, an economist at FocusEconomics: “Infrastructure investment and robust manufacturing activity will be key to driving growth ahead, while recent reform efforts should also bear fruit and stoke foreign investment inflows.”
5-year economic forecasts on 30+ economic indicators for more than 130 countries & 30 commodities.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Date: January 23, 2020
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