Frontier Markets Recover, but Inflation & Unemployment Rising


Frontier Markets (FM) showed better GDP results in 4Q20 than the previous quarter, but rising inflation and unemployment rates highlight macroeconomic challenges, as shown in Fitch Ratings latest ‘Frontier Vision’ chart pack.

Annual GDP outturns improved in 4Q20 compared with 3Q20 in Armenia, Azerbaijan, Costa Rica, Guatemala, Jordan, Mongolia, Nigeria, Paraguay, Vietnam, Zambia among other countries.

At the same time, labour market conditions deteriorated in 4Q20 versus 3Q20, with unemployment rates rising in Azerbaijan, Jordan, Mongolia, Nigeria and Tunisia.

Furthermore, consumer price inflation has risen in recent months across many FM, including Armenia, Belize, El Salvador, Georgia, Iraq, Suriname and – especially – Nigeria, where inflation accelerated to 18.2% yoy in March 2021.

Fitch’s quarterly ‘Frontier Vision’ chart pack tracks high-frequency macroeconomic data for the countries included in the Next Generation Markets (NEXGEM) Index. The charts cover five years of historical data and the choice of data series has been harmonised as far as possible across all countries to facilitate comparisons. The index comprises countries representing sub-Saharan Africa, Latin America, the Caribbean, the Middle East, Europe, Asia and Oceania.