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The five best-positioned emerging markets in the face of the coming economic recovery


The coronavirus pandemic has brought with it a new economic crisis, which is expected to come to light in 2021. Crédito y Caución has carried out an analysis, where it has concluded that five emerging markets are especially prepared for new business opportunities in this growth. They are Chile, Egypt, Senegal, Malaysia and Vietnam.

All five meet three criteria: good forecasts for the recovery of their GDP, effective containment of the pandemic and greater institutional stability of their economic policies and institutions.

Among them, Chile is the market that has best positioned in its area in the face of the post-pandemic recovery. This is due to the fact that its economy is quite diversified, with a high telework rate. The recovery of retail sales and in the manufacturing industry since the third quarter of 2020, which together with exports that have benefited from the improvement in the price of copper.

They foresee that with the deployment of vaccines they will be one of the fastest in their deployment in the region, in addition to low public debt, which will join the continuation of fiscal incentives. Its most prominent sectors are agriculture and packaging, which import machinery and technology, and the pharmaceutical.

Within the African continent, Egypt, which has already shown strong growth in recent times due to its macroeconomic stabilization program, aspires to become the gas center of the Mediterranean. Although with the tourism collapse and oil price decline in 2020 a relaxation of monetary policy was required. Its growth is expected to return to its rhythm, although it continues to present vulnerabilities, such as dependence on remittances and tourism, the gas, pharmaceutical and ICT sectors attract foreign direct investment.

On the same continent, Senegal, which applied a three-month state of emergency, currently has a stable political climate, relatively strong democratic institutions, and high GDP growth. The country has developed a stimulus plan equivalent to 7% of GDP, anticipating that the growth of the coming years will be driven by projects of hydrocarbons, the expansion of mining and public works to improve the transport network and electricity supply.

From Asia, Malaysia, which has infection rates lower than the Asian average, has quality infrastructures and a qualified workforce for the manufacture of electronic products, which is estimated to achieve solid GDP growth. The country has announced a strong fiscal stimulus package, in addition to benefiting from strong trade ties with neighboring countries. They expect 2021 to be a good year for their export sectors, counting on pplastics and rubber tripled their sales in 2020 due to the demand for sanitary products.

Finally Vietnam, the last on this list, has managed to avoid the recession in 2020 and its GDP growth is expected to accelerate to 7.7% in 2021, being one of the most dynamic economies in Asia. It has managed to establish itself as dfate of companies that want to move their low-skilled manufacturing out of China, due to the low wage costs. Its logistics and textile sectors will have strong growth potential in 2021 coupled with the recovery in global demand. The tourism sector is expected to decline, which in the past attracted heavy investment.


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