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Emerging Markets Outlook 2016 – Brics? Civets? Pay Attention to the “PAUMDEK” Countries

By January 19, 2016 October 17th, 2017 No Comments
Emerging Markets Outlook 2016 PAUMDEK

As we kick off 2016, we thought it appropriate to put together an emerging markets outlook that we at Velocity Global believe are poised to make significant impacts in the regions where they are located. In the spirit of past emerging market acronyms—BRICS (Brazil, Russia, India, China and South Africa), or CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa)—we’ve decided to coin the acronym “PAUMDEK” in reference to our expected emerging movers-and-shakers for 2016. In no particular order and with no particular regional preference.

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PAUMDEK is composed of:

In an often futile effort to maintain some order in the chaotic landscape of emerging economies, let’s take a regional approach to examining the PAUMDEK countries beginning with Central America.

Central America Emerging Markets Outlook

PANAMA: As the only country in Central America to really move the financial needle, Panama’s fortunes in 2016 will be dictated by the same metal and concrete monstrosity that has determined the country’s financial fate since 1914—The Panama Canal. While the Canal has been in existence for over 100 years, the largest expansion in the Canal’s history is slated to be completed in 2016, with 96% of  the project already completed as of December 31, 2015 according to the Canal’s website.  Expect this to bring increased revenue in a variety of forms to the country in 2016.  That revenue will make its way into Panama’s already robust banking and financial services sectors.

South America Emerging Markets Outlook

ARGENTINA: In a region that has largely been dominated by former economic powerhouse Brazil, but in 2016 expect the mighty to fall and fall hard. Leaving many of its neighbors to founder in its wake. While much of the continent will likely suffer in the New Year, Argentina appears poised to climb the economic ladder under the leadership of its new president, Mauricio Marci.

According to a recent article in the Washington Post, Marci has recently shed exchange controls that were strangling Argentina’s importers, set a path to closely align the country with the U.S. and other major world economies, and has made great strides in rooting out the corruption that plagued Argentina under the previous president. While some economists predict that Marci’s “radical” policies could actually lead to recession caused by overspending in 2016, in a continent that is largely on a downward spiral, Marci’s policies may be just what Argentina needs to rise above the rest. Learn more about doing business in Argentina.

Middle East Emerging Markets Outlook

UNITED ARAB EMIRATES: To some observers, this may seem like an obvious choice to make this list. Pictures of flashy skyscrapers come to mind. But to others, the U.A.E. may seem like a risky bet given the steady and prolonged decline in oil prices. The truth is, both camps of observers may be right, but we’re siding with the former. There’s no doubt that the drop in oil prices will have an effect on the U.A.E. in 2016. But, what sets the U.A.E. apart from its crude-pumping kin is that the U.A.E. has done a remarkably good job of diversifying its economy. Particularly in the emirates of Abu Dhabi and Dubai. Dubai’s massive tourism and retail sectors should continue to grow in 2016. Recent foreign acquisitions by the

Dubai’s massive tourism and retail sectors should continue to grow in 2016. Recent foreign acquisitions by the Abu Dhabi Investment Authority, the second largest sovereign wealth fund in the world, have the U.A.E. positioned to succeed financially despite the decrease in commodity prices. Read more about U.A.E. employment options.

Southeast Asia Emerging Markets Outlook

MYANMAR (Burma): As we mentioned in our blog post, business in Myanmar is better than it has been in decades. The only question that remained from that post was what would be the results of the most significant elections in the country’s history. The ballots are in and the party led by Nobel Laureate Aung San Suu Kyi prevailed. In 2016, expect the country to continue to make significant infrastructure and regulatory improvements. As well as an increase in foreign investment from Japan and Singapore. The recent election results combined with increased clarity in the regulatory landscape make a country with over 50-million people and sharing a border with a third of the world’s population hard to ignore.

Africa Emerging Markets Outlook

DEMOCRATIC REPUBLIC OF THE CONGO (DRC):

This prediction may be a long shot. But, we believe the DRC will have a double-digit economic growth in 2016. In a country that has traditionally made headlines for its abundance of armed groups and constant conflict, the DRC has made great strides in recent years highlighted by a steady 9% growth in 2015. That growth doesn’t show any signs of slowing in 2016.  This is primarily due to the country’s extractive and manufacturing sectors, 1% inflation, and a calm security environment. New elections in 2016 consequently may determine the country’s economic trajectory for the year.

ETHIOPIA:

Pay attention to this east African country this year.  The World Bank predicts Ethiopia’s economy to grow at a robust 10.5% in 2016. Driven by a strong construction sector, particularly in the capital of Addis Ababa, and bolstered by single digit inflation, Ethiopia seems positioned to become a true economic player in East Africa.

There is no doubt that the country certainly has its challenges. Overall it should be a beacon of economic stability in Africa in 2016.

KENYA:

Yes, sub-Saharan Africa accounts for the largest regional bloc on our list. But for good reason! It has the largest middle-class growth in the world. Kenya has made the wrong kind of headlines recently for attacks by the terrorist group Al-Shabab. But in the wake of those, it has dramatically strengthened its security infrastructure. Nairobi represents one of the most dynamic business climates in the continent and political stability in the country. With investments in the country’s power sector and national infrastructure, Kenya seems to be making the necessary investments to ensure its economic success well past 2016.

We hope you found our analysis ringing true for 2016. Let us know if you have any specific questions about any of the PAUMDEK countries we listed here.  We offer our FSaaS solution for lightweight hiring in over 185 countries.