Belt Road Nations High on Bloomberg Emerging Markets 2018 Performance

Multiple Belt and Road (BRI) nations have featured in the top 20 emerging market economies, according to Bloomberg’s 2018 rankings. Russia finished in second place, just behind Malaysia, and ahead of China in third. Other Asian countries, such as Philippines, Thailand, Indonesia, and India also all featured in high positions (click on links for complimentary investment guides) while key European Belt and Road nations, such as Poland, Hungary, Romania, and Croatia also featured. Turkey, another BRI nation, fell in rankings this year due to high inflation costs, essentially wiping out real GDP growth during 2018.

The rankings were based upon a number of measured criteria, including metrics ranging from growth prospects to the state of the current account, sovereign credit ratings, and stock and bond valuations. GDP growth and current account balances are from economist forecasts for 2018 and 2019 compiled by Bloomberg. Sovereign ratings are from S&P Global Ratings. Real effective exchange rates are based on data from JPMorgan Chase.

Russia gained 2.36 points on these criteria, topped only by Malaysia with 2.55. The Asian country has held on to the top spot in the list since the last ratings were published in June, thanks to its current account surplus and relatively stable economic growth outlook and valuations. The Russian economy’s stronger position was earlier noted in the annual World Banks’ Doing Business survey, which ranks 190 national economies based on 11 areas of business regulation. This year, Russia rose to 31st place, four spots above last year’s results.

China’s fall to third place is a result of investors deciphering how the country is impacted by the US-China trade frictions.

The rankings are as follows:

1 – Malaysia
2 – Russia
3 – China
4 – Philippines
5 – Colombia
6 – Thailand
7 – Poland
8 – Mexico
9 – Chile
10 – South Korea
11 – Indonesia
12 – India
13 – Peru
14 – Hungary
15 – Brazil
16 – Romania
17 – Egypt
18 – Croatia
19 – South Africa
20 -Turkey

Chris Devonshire-Ellis of Dezan Shira & Associates comments: “Some of the results seen have been impacted by US tariff threats and sanctions, and this is especially the case with China and Turkey. Russia, though, is showing stronger signs of recovery and adapting to sanctions, showing such measures only have a limited shelf-life before economies adapt and can absorb the impact. The ASEAN nations are all showing strong growth, my only surprise being the omission of Vietnam. The trade and infrastructure investment into BRI nations continues to reverberate throughout these economies and these will all be players to watch in 2019.”

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