Political tensions come to the fore

Political tensions have re-emerged in a number of frontier market economies in recent weeks, casting a shadow over the economic outlook. The outcome of the recent presidential election in Zambia has been disputed in court by the opposition, resulting in a period of political uncertainty. Elsewhere, following the collapse of Croatia’s ruling coalition earlier in the year a snap election is due in September. The chances of another highly fragmented parliament are high. Meanwhile, there is growing evidence of resistance to reform in Argentina and Kazakhstan.

It’s not all doom and gloom. After all, the fact that a number of frontier market economies have embarked on the path of much-needed reform is a positive step. Nonetheless, recent events serve as a reminder that for these economies the road ahead will be bumpy.