Signs of improvement in big frontier oil exporters

The latest data suggest that, in aggregate, GDP growth in the largest frontier oil-exporting economies has started to pick up. Kazakhstan’s economy expanded by 3.4% y/y in Q1, the fastest pace of growth since the end of 2014. Meanwhile, the recession in Nigeria has eased – GDP contracted by 0.6% y/y in Q1, compared with a drop of 1.7% y/y in Q4. And while Saudi Arabia’s economy appears to have weakened at the start of this year on the back of oil output cuts, easing fiscal austerity has supported stronger growth in the non-oil sector. We expect this trend to continue over the coming quarters. Indeed, despite weaker growth in Saudi Arabia, the frontier oil economies should record stronger growth this year than in 2016.