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BMI Research, a financial market analysis firm, has recently identified 10 emerging markets from the Asia and Africa region that are set to become new drivers of economic growth over the next ten years. Pakistan also made the cut. Other countries on the list include Bangladesh, Ethiopia, Egypt, Kenya, Indonesia, Myanmar, Nigeria, Philippines, and Vietnam.
The report says that construction and manufacturing will play an important role in driving the economies of these countries. Pakistan, Bangladesh, and Myanmar will specifically see a strong growth in the manufacturing industry. All countries are set to see the construction sector thrive, particularly to assist urban growth and the manufacturing industry. Mining and Gas industry will play a far smaller role than it has in the past years. While the commodity-driven model is not expected to make a comeback.
Pakistan, whose current primary sector is agribusiness with textile and rice being the key exports, is expected to become a manufacturing hub in the coming years. In the beginning of BMI’s forecast period the textile and automotive sector presented a faster growth. The domestic manufacturing investment is expected to be boosted considering the lower energy prices and an improved domestic energy supply.
Bangladesh’s GDP growth in the last year was higher than Pakistan and their unemployment rate was 4.9% compared to our 6.5%. Their export-oriented industrial sector has contributed a great deal to their GDP and the BMI research predicts that it is all set to become a manufacturing hub in the coming years.
All these countries belong to, more or less, a similar GDP growth bracket and an unemployment rate that is very much alike. However, by 2025, the aforementioned countries are expected to add $4.3 trillion to the global GDP. Down the road, all these countries are expected to see development that will contribute largely in not only to the GDP but also to employment opportunities.
Here’s a detailed look at all the countries:
Pakistan
Primary sector: Agribusiness, oil
Key exports: Textiles, rice
2015 GDP growth: 4.2%
Unemployment rate: 6.5%
Exchange rate: 104.85 Pakistani rupees per dollar
“Pakistan will develop as a manufacturing hub over the coming years, with the textile and automotive sectors posting the fastest growth at the beginning of our forecast period. Domestic manufacturing investment will be boosted by the windfall from lower energy prices compared to the last decade, and improved domestic energy supply.”
Bangladesh
Primary sector: Agribusiness
Key exports: Garments, agricultural products
2015 GDP growth: 6.4%
Unemployment rate: 4.9%
Exchange rate: 78.4 Bangladeshi taka per US dollar
“Bangladesh’s export-oriented industrial sector already accounts for more than a quarter of GDP and will continue to develop as a global manufacturing hub in the coming years.”
Egypt
Primary sector: Natural gas
Key exports: Oil, fruits and vegetables, cotton
2015 GDP growth: 4.2%
Unemployment rate: 12.8%
Exchange rate: 7.72 Egyptian pounds per dollar
“We expect continued investment across the housing sector in Egypt, given the almost 1 million additional urban residents per year that we forecast over the next 10 years. There will be some investment in Egypt’s large manufacturing export base in a continuation of recent investment in the autos and food sectors.”
Ethiopia
Primary sector: Agribusiness
Key exports: Coffee, oilseeds, vegetables, gold
2015 GDP growth: 10.2%
Unemployment rate: 16.8%
Exchange rate: 21.55 Ethiopian birr per dollar
“Construction to meet rapid urbanisation and ambitious state infrastructure targets will be the main driver of economic growth in Ethiopia … Ethiopia’s construction industry will record the highest growth in Sub-Saharan Africa, averaging real annual growth of 10.7% between 2016 and 2025.”
Indonesia
Primary sector: Agribusiness
Key exports: Mineral fuels, machinery parts
2015 GDP growth: 4.8%
Unemployment rate: 5.5%
Exchange rate: 13,577.6 Indonesian rupiah per dollar
“Growth in Indonesia will be far less commodities-centric than over the past decade, as the mining and oil and gas sectors will stagnate … The government remains committed to developing a manufacturing-based export economy by boosting infrastructure spending and streamlining bureaucracy.”
Kenya
Primary sector: N/A
Key exports: Tea, horticultural products, coffee
2015 GDP growth: 5.6%
Unemployment rate: 40%
Exchange rate: 99.73 Kenyan shillings per dollar
“As Kenya imports almost all of its energy needs, lower average oil prices over the next decade compared to the previous decade will boost both Kenyan consumption and non-energy investment. Growth will be centered in … infrastructure (including renewable energy), financial services and retail trade.”
Myanmar
Primary sector: Mining
Key exports: Natural gas, wood products
2015 GDP growth: 7%
Unemployment rate: 5%
Exchange rate: 1,171.8 Burmese kyat per dollar
“Investment will continue to pour into a range of industries as Myanmar reaps the benefits of substantial political reform enacted since 2010. We believe that the trends of economic liberalisation and political democratisation will remain in place and keep the economy on track for strong growth over the coming years.”
Nigeria
Primary sector: N/A
Key exports: Oil, cocoa
2015 GDP growth: 2.7%
Unemployment rate: 23.9%
Exchange rate: 196.9 Nigerian naira per dollar
“The significant growth that we forecast for Nigeria’s economy will be principally driven by the secondary and tertiary sectors of the economy. Financial services are a bright spot due to the relatively low penetration of financial services in the country. Retail sales will grow strongly, though mostly in the low value goods segment due to the fact that essentials spending remaining at around three quarters of total household income.”
Philippines
Primary sector: N/A
Key exports: Semiconductors and electronic products, transport equipment
2015 GDP growth: 5.8%
Unemployment rate: 6.3%
Exchange rate: 45.503 Philippine pesos per dollar
“Key sectors will include autos and construction. Robust private consumption and a booming construction sector will translate into growing demand for both passenger vehicles and commercial vehicles … Ongoing economic and business environment reforms, such as an anti-corruption drive, have made the Philippines more conducive for investment.”
Vietnam
Primary sector: Agribusiness, oil refining
Key exports: Clothes, shoes, electronics
2015 GDP growth: 6.7%
Unemployment rate: 3%
Exchange rate: 21,928 Vietnamese dong per dollar
“We expect the manufacturing and construction sectors to outperform… thus helping to underpin growth in the broader industrial sector. These sectors will remain attractive to foreign investors, owing to relatively low labour costs [and] the government’s gradual relaxation of foreign ownership restrictions rules.”
Source – World Economic Forum
