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October 18, 2012
We expect the Asian frontier markets (AFMs) to be on a solid and accelerating growth path over the next five years, with real GDP growth potentially rising to 7-8% annually. All of the countries are expected to be members of the WTO by 2017. Trade at the regional and international levels is expected to deepen and drive growth in these countries. There are some risks to this constructive outlook such as natural catastrophes, political instability or even risks that could arise from rising interdependence with the global economy. Beyond these immediate risks, there are important challenges to tackle such as poverty reduction and protection of the environment and the national heritage. Improvement on these fronts will help the AFMs maintain their attraction for FDI flows. Finally, economic reform will need a more commercially-driven banking sector and financial markets, as well as a robust regulatory regime. [more]
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