Signs of improvement in frontier economies

The recent improvement in the global economic backdrop has been mirrored by a pick-up in growth across frontier markets. National accounts data released by early-reporting frontiers over the past month showed most economies recorded stronger growth in the final quarter of 2016. Kazakhstan continued to recover from a sharp downturn earlier in the year, while Romania remained Emerging Europe’s top-performing economy. The drip-feed of encouraging GDP data is likely to continue over the coming weeks. In the largest frontier economy, Saudi Arabia, our GDP Tracker suggests that growth picked up to 3.0-3.5% y/y in the final months of last year. The rise in oil prices and a record-breaking international bond sale allowed the government to ease back on austerity, supporting a recovery in the non-oil sector. At the same time, Argentina’s recession appears to have abated and Croatia’s economy is likely to have expanded at its fastest pace in almost a decade.