Four Economies that are Ready to Take Off

While hopes have been raised that the global economy is heading into a period of stronger growth, the fact remains that opportunities for growth in international markets remain relatively limited when compared to previous decades.  For the past five years, the global economy has grown by little more than 3% per year, the longest period of such sluggish growth in 25 years.  Moreover, growth is forecast to rise only slightly over the next couple of years.  In developed economies, the outlook for growth has improved, but lower growth ceilings in North America and Europe mean that growth will remain below pre-financial-crisis levels in the coming years.  Among emerging markets, Asia remains the key growth market as India, China and some Southeast and South Asian economies will manage to record strong rates of growth in the coming years.  However, most emerging markets outside of East and South Asia have experienced a difficult few years and the recovery from this downturn is likely to prove to be slow and difficult.  Fortunately, there are a handful of countries that have struggled in recent years, but are expected to record stronger rates of growth in the coming years and to provide for growth opportunities for both businesses and investors.

Iran: The most obvious choice for a growth market among the economies that have struggled in recent years is Iran.  As many international sanctions (but not all) have been lifted in the wake of the nuclear deal between Iran and the international community, the outlook for the beleaguered Iranian economy has improved dramatically.  Already, the country’s relatively diverse economy is attracting significant interest from foreign investors in a variety of industries.  Of course, Iran’s oil and gas industry is the cornerstone of the country’s economy, and with Asian export markets eager to gain access to Iran’s energy exports, the prospects for long-term growth in this sector are formidable.  Meanwhile, Iran’s economy is highly diversified by the standards of the Middle East and the country was once the region’s manufacturing hub.  As such, many manufacturing companies are eyeing potential production facilities in Iran.  While Iran’s economic outlook has improved, there are a number of potential risks that could derail the country’s recovery.  For example, the potential for a new standoff between the United States and Iran has increased under the Trump Administration.  Likewise, Iran’s worsening relations with Saudi Arabia and that country’s Sunni allies has the potential to lead to both an economic and an actual conflict in the Middle East.  If Iran can sort out its foreign relations, the potential for economic growth in that country will soar.

Serbia: Another country that is on the verge of an economic breakthrough after decades of having its economic development held back by politics is Serbia.  While the rest of Central Europe has benefitted from a massive inflow of foreign investment over the past three decades, Serbia fell well behind most of its neighbors due to the conflicts in the former Yugoslavia and Serbia’s political isolation in Europe.  Now, Serbia is the region’s last untapped manufacturing center, one that was once among the most productive in the region.  As such, there is significant potential for investment in manufacturing operations in Serbia and the country’s low production costs and strategic location could make it the next center of export-oriented manufacturing in Central Europe, following in the footsteps of countries such as the Czech Republic, Slovakia and Romania.  Should Serbia succeed in joining the European Union and integrating with the region, its economic outlook will brighten significantly and growth rates would soar as investment poured into the country.

Ghana: One country that was a star performer before falling on hard times in recent years is Ghana.  Earlier this decade, the development of the country’s oil and gas industry led to Ghana recording some of the world’s highest rates of economic growth.  However, the sharp fall in oil prices in 2014 led to hard times for the Ghanaian economy in recent years and a devastation of the government of Ghana’s financial position.  Now, oil output is set to rise sharply in the coming years, and should oil prices rise (or at least not fall further) Ghana will be able to once again record some of the highest rates of economic growth in the world in the final years of this decade.  Moreover, other sectors of the Ghanaian economy are forecast to grow at a strong pace in the coming years as they benefit from the fact that Ghana has some of the lowest levels of political risk in Africa thanks to what is one of the region’s most successful and stable democracies.

Costa Rica: One final country that is expected to experience much higher rates of economic growth in the coming years is Costa Rica.  This country had been one of Latin America’s best-performing economies prior to the global financial crisis, but recent years have seen a significant reduction in foreign investment in Costa Rica, due in large part to fears of government interference in the country’s economy.  However, these fears appear to have abated as the country has received a number of major new foreign investments in recent months.  As a result, economic growth rates are forecast to rise significantly in Costa Rica in the coming years, allowing the country to return to its position as one of the fastest-growing, and most stable, economies in Latin America.  Furthermore, Costa Rica is in a strong position to maintain, and even improve, its access to the vast North American market, despite the threat of protectionism emanating from the United States.  This will allow for Costa Rica to remain one of the region’s best-performing economies for the foreseeable future.