The global economy is set for significant growth, with emerging markets getting ready to lead the charge. The latest forecast from the International Monetary Fund’s (IMF) World Economic Outlook, published in April 2024, highlights the rapid economic growth expected in countries over the next five years. The report reveals that the top-performing economies are primarily developing nations from Africa and Asia, showcasing their potential and dynamic growth prospects.
A key metric used in the IMF’s forecast is the compound annual growth rate (CAGR). In simple terms, CAGR represents a country’s average yearly economic growth rate over a specified period, considering the effect of compounding. This means the growth rate is applied to an increasing base yearly, providing a more accurate picture of sustained growth over time.
This forecast reiterates the role of these emerging markets in the global economy, reflecting their increasing influence and contribution to global economic stability and growth. As these countries continue to develop, they offer substantial opportunities for investors and promise significant improvements in the quality of life for their populations.
Guyana – 19.8%
The small South American country of Guyana has a compound annual growth rate (CAGR) of 19.8%, which is mostly due to its expanding oil output, which has reached 645,000 barrels per day (bpd). Despite its South American location, Guyana shares strong ties with the Caribbean as a founding member of the Caribbean Community (CARICOM). Abundant natural resources including fertile agricultural lands, valuable minerals like bauxite and gold, and extensive tropical forests covering 80% of the country contribute to its economic vibrancy. Additionally, recent discoveries of offshore oil and gas reserves promise further economic expansion and diversification. By 2028, Gyuana is projected to have the highest crude oil production per capita.
Mozambique –7.9%
Mozambique, with a projected compound annual growth rate (CAGR) of 7.9%, is a rapidly growing African nation. The country is rich in resources, including arable land, water, energy, minerals, and newly discovered offshore natural gas deposits.
Mozambique has three deep seaports. These ports act as crucial links for its neighbouring countries, which don’t have direct access to the ocean. They rely on Mozambique to reach global markets for their trade. Additionally, Mozambique shares a strong economic relationship with South Africa, which boosts both countries’ economies and contributes to stability and growth in the region
In 2023, Mozambique’s economy grew by 5%, driven by the start of Liquified Natural Gas (LNG) production and strong growth in agriculture and services, particularly transport, which helped offset lower manufacturing and construction activity.
Rwanda – 7.2%
Amidst challenges like weakening external demand and inflation control measures, Rwanda has a CAGR of 7.2%. With aspirations to achieve Middle-Income status by 2035 and High-Income status by 2050, Rwanda implemented a seven-year National Strategies for Transformation (NST) aligned with Sustainable Development Goals (SDGs). Despite hurdles, its economy recorded a 7.6% growth in the first three quarters of 2023, driven by sustained domestic demand and an industrial sector rebound.
Bangladesh – 6.8%
Over the past two decades, Bangladesh has experienced rapid economic progress driven by factors such as a strong demographic dividend, robust exports like ready-made garments (RMG) which accounts for 85% of total exports, and remittance inflows. From being among the world’s poorest nations in 1971 to achieving lower-middle-income status in 2015, Bangladesh is on track to graduate from the UN’s Least Developed Countries list by 2026. Significant strides in poverty reduction and improvements in human development outcomes, including reductions in infant mortality and increases in literacy rates, mark Bangladesh’s journey towards prosperity and development.
Ethiopia – 6.7%
Ethiopia, Africa’s second most populous nation with 126.5 million people, has a 6.7% CAGR and is one of the fastest-growing economies in the region. Over the past 15 years, its economy grew at an impressive average of nearly 10% per year, driven by public infrastructure investments.
The government’s 10-Year Development Plan based on the 2019 Home-Grown Economic Reform Agenda, aims to sustain high growth, transition to a private-sector-driven economy, and enhance efficiency in key sectors like energy, logistics, and telecom. The plan also focuses on improving the business climate and addressing macroeconomic imbalances.
Niger – 6.7%
According to the International Monetary Fund (IMF), Niger is projected to experience economic growth in the coming years. Despite current challenges, the country’s economy is forecasted to grow at a rate of 6.7% per annum, driven by improvements in agricultural production and investments in key sectors. This growth trajectory is expected to continue, with predictions suggesting a growth rate of 6.9% in 2024 and sustained expansion in subsequent years. While challenges persist, including high poverty rates, the IMF’s projections offer a promising outlook for Niger’s economic future, with potential for increased economic diversification and improved living standards for its citizens.
Uganda – 6.6%
Despite external shocks, Uganda’s economy has demonstrated resilience, with growth slightly increasing. In the first quarter of 2024, GDP expanded by 5.3%, driven by an oil-related construction boom and robust agricultural growth, despite unpredictable weather conditions.
The nation saw an increase in employment and private investment, which supported domestic demand all year long. Increases in output, new orders, and employment throughout this extended period of prosperity were indicative of Uganda’s capacity to keep the economy moving forward.
India – 6.5%
With a population exceeding 1.4 billion, India is the world’s largest democracy and a key player in the global economy. Over the past decade, its integration into the global economy has fueled significant economic growth, positioning it as one of the fastest-growing economies worldwide.
With aspirations to achieve high middle-income status by 2047, India remains committed to addressing climate change and aims for net-zero emissions by 2070. Remarkable progress has also been made in poverty reduction, with the country halving extreme poverty between 2011 and 2019,
Vietnam – 6.4%
Vietnam’s shift from being a centrally planned to a market economy, propelled the country from extreme poverty to lower middle-income status, making it one of the most dynamic emerging nations in East Asia.
Over the past few decades, Vietnam’s GDP per capita has surged six-fold, reflecting its economic progress and development. The agriculture sector has played a significant role in sustaining this growth, growing at a rate of 2.5 to 3.5 percent annually. In 2021, it contributed 13 percent to GDP and employed 29 percent of the population, ensuring both economic growth and food security.
Senegal – 6.3%
Despite facing challenges such as political tensions and persistent inflation, Senegal maintains its status as one of the fastest-growing emerging markets with a CAGR of 6.3%. This growth highlights the country’s economic potential. While structural vulnerabilities persist, including low productivity and limited human capital, Senegal’s commitment to diversification and investment in key sectors like agriculture and energy bode well for its future growth. Delays in hydrocarbon production present short-term hurdles but offer long-term opportunities for sustainable development and economic expansion. Overall, Senegal’s growth positions it as a promising destination for investment and development initiatives.
