Finance Monthly September 2019 Edition

26 www.finance-monthly.com FINANCE & BUSINESS - EMERGING MARKETS The LATAM giants The Latin American economies of Mexico, Brazil, Argentina and Colombia are expected to grow in power in 2020 as GDP improves. The GDP in Argentina is predicted to grow from recession to 2.2% growth next year though this may be affected by recent political instability. Mexico has continued growing despite a general slowdown and Brazil and Colombia have outperformed expectations. Against a challenging backdrop and series of considerable hurdles, LATAM countries are continuing to show strong growth prospects. Despite ongoing political instability in these markets and the risks posed by their increasing dependence on exports from China, these countries have strong business-friendly governments in place which can ensure sustainable growth and economic prosperity. These markets are expected to continue growing at a moderate pace, showing economic resilience and ultimately proving a viable option for long-term investment opportunities. South Africa South Africa has recently been identified as a major player in the Emerging Market space. Having previously been recognised as one of the ‘fragile five’ as recently as 2013, this may come as a surprise to seasoned investors who have witnessed the nation’s resulting struggle towards reformation and stable growth. However, in the first months of 2019 and like many other emerging markets, the country has faced its fair share of struggles. With unemployment reaching a 15-year high of 27%, and the economy contracted by 3.2%, the country marked the biggest quarterly slump in a decade and has made the uphill battle even steeper. Amidst the current economic struggles and the fact that China, South Africa’s largest trading partner, is once again embroiled in trade conflicts with the United States, the country is working to manoeuvre away from slipping into a debt crisis. While its implications are currently not seen as lasting, the country continues to suffer from a lack of capital depth which could ultimately lead to a state of increased economic volatility.