The impact of COVID-19 has been and will be with no doubt significant all over the world. It is quite challenging to estimate with absolute certainty how things will evolve both from an economic and a social point of view. In this paper, we have discussed several factors likely to have helped make the virus less life-threatening and so more manageable for Frontier Markets: timely restrictive measures, lower degrees of urbanisation, a younger population with fewer people suffering from obesity and smoking-related conditions. Those are the reasons why we believe these countries may have an edge in this war.
From an economic standpoint, Frontier Markets have entered this crisis in relatively good shape. Low levels of debt have allowed for strong fiscal responses, while a solid banking sector will be able to help consumers and businesses providing them with liquidity. These economic features have contributed to a lower reduction in GDP Growth compared to Emerging and Developed Countries.
Frontier Markets’ “resilience” should not be surprising. These countries are historically used to face tough situations and to take the best out of them. Since they are constantly dealing with natural disasters and epidemics, they seem to be more culturally and physically prepared to cope with exceptional circumstances, especially compared to Developed Markets.