by Mike Kapsch, Investment U Research
Sunday, January 8, 2011
If you were to ask me to predict the two fastest-growing economies in 2012, two nations I probably wouldn’t mention are Libya and Mongolia.
Yet that’s exactly what The Economist’s Intelligence Unit forecasts will happen…
Libya is set to be the world’s fastest-rising economy in 2012 with a GDP growth rate of 22%. And Mongolia is set to place second with a growth rate of 15%.
Have The Economist experts gone crazy?
It was just October of last year that Colonel Muammar Qaddafi was killed. And I haven’t seen many headlines about Mongolia’s booming economic growth outside of Investment U.
A Closer Look At Libya and Mongolia’s Rapid Growth
The Economist claims, “Libya’s economy will grow faster than any other in 2012 boosted by reconstruction following the fall of Muammar Qaddafi’s regime. The surge is a bounce-back from an even more precipitous slump while war raged.”
Last year, Libya’s civil war cost the country tens of billions of dollars and thousands of lives. Yet Qaddafi’s falling out signifies a new chapter. Libya has $60 billion in sovereign funds to invest in infrastructure, housing and other constructive avenues starting this year. Not to mention, high oil revenue and a population of just 6.3 million give Libya one of the highest GDPs per capita in Africa.
Mongolia, on the other hand, is benefiting from a massive coal and copper mining boom. According to the International Monetary Fund, the country’s economy could expand at almost 23% in 2013. But the IMF also warns investors need to be weary of Mongolia’s inflation rate, currently up around 12.6 percent.