Low oil prices a challenge for key frontier markets

Despite a recent rebound, low oil prices are posing a challenge for many frontier markets. Low oilprices were one factor that led the IMF to cut its 2015 growth forecast for Sub-Saharan Africa, andwe believe that the Fund is still overly optimistic. Nigeria has been hit especially hard; growth thereslowed to its weakest pace since early 2012 in Q1. Although fears about Venezuela’s solvency haveeased following another loan from China, broader economic conditions continue to deteriorate.Meanwhile, perhaps counter intuitively, growth has actually picked up in Saudi Arabia as thegovernment has dipped into its large savings in order to raise spending.