Recovery in frontier economies continues

The raft of GDP data released over the past month or so showed that the recovery in frontier markets strengthened in Q2. According to our GDP-weighted measure of growth, frontier economies expanded by 2.4% y/y in Q2, up from 1.9% y/y in the previous quarter and the fastest pace since the end of 2015. That said, frontier economies continued to grow at a slower pace than other emerging markets. At a country level, the downturn in Saudi Arabia’s economy deepened on the back of oil output cuts. But this was more than offset by stronger growth elsewhere. Nigeria recorded positive GDP growth for the first time in six quarters. Kazakhstan’s economy also picked up, while looser fiscal policy and robust consumer spending continued to support strong growth in Romania. More timely data suggest that the recovery gathered a bit more pace in Q3 and frontier markets are almost certain to record stronger GDP growth this year than in 2016.