What do Iraq, Sri Lanka and Mongolia Have in Common?

April 20th, 2012
in econ_news

Econintersect:  An article at Advisor One reports on the top ten countries for growth over the next several decades years.  And yes, the three in the headline are on that world-growinglist.  The article draws on data from a Knight Frank and Citi Private Bank report.  Number 1 on the list is Nigeria with an estimate of 8.5% per year average from 2012 to 2022.  The largest country on the list is India (second ranked at 8.0% growth).  The rest of the BRICS (China, Russia, Brazil and South Africa) are not in the top ten.

The next ten years will be the Asia decade as eight of the ten countries are in Asia .  The other two are in Africa.  Number ten on the list is Egypt, with an estimated 6.4% average annual growth rate.  The entire list can be reviewed in a slide show at Advisor One.

Follow up:

Here are the top ten and the bottom ten growth countires projected for 2010-2050:

wealth-global-countires-Frank-Knight-Citi-2012

With the top fastest growing countries all in Asia and Africa, it is interesting that capital growth objectives in those two regions rank lower for high net worth investors than in Europe and North America.

wealth-strategy-global-Frank-Knight-Citi-Global-Wealth-Report-2012

Econintersect found it interesting that in 2011 the changes in investment allocations globally were so strongly away from equities.  Portfolios of the wealthy are very little allocated to currency and commodities, including gold.

wealth-strategy-global-allocations-Frank-Knight-Citi-Global-Wealth-Report-2012

Finally, it was interesting that the same report ranked the 20 most important cities in the world, now and projected in 10 years.  Europe has a large number of cities appearing compared to Asia currently and almost as many in 10 years in spite of the more rapid growth projected for the eastern sections of Eurasia.

wealth-global-cities-Frank-Knight-Citi-2012

Note that three cities appear on the fastest growing in importance list that do not appear on either of the other lists:  Rio de Janeiro, Istanbul and Sydney.

John Lounsbury

Sources:









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2 comments

  1. optionsgirl says :
    ****-

    Miami is ranked #11 on IN 10 YRS
    and is ranked #13 on the FASTEST GROWING list.

    Is this a function of the real estate collapse? Miami seems to have hit bottom and is being snapped up by international buyers with cash, particularly from Latin America and Brazil.

    What businesses are coming into Miami?

  2. Admin (Member) Email says :

    OptionsGirl - - -

    I wondered about that as well. I saw an article this week about a 14 year old girl who bought a home in South Florida for $11,000 cash that she had saved from baby sitting and odd household jobs since she was 9 years old. I didn't read very far but I assume the home was bought by a trust with a guardian because of her age. The home was completely habitable and in no immediate need of repair.

    I have read other stories about investors buying up South Florida housing units at similar low prices and converting them to rentals.

    There may still be a big retiree market and if a retiree can live in Florida and only pay a few hundred a month in rent, a million retirees each spending $10,000 a year for basic needs consumption adds $10 billion high velocity dollars to the economy each year.

    Example of how the large supply of low cost living units can be very attractive for low-cost rental property:

    Cost (acquisition and refurbish): $28,000
    Landlord maintenance, insurance and taxes: $2,000 a year
    Rent: $400 per month
    Net income per year: $4,800 - $2,000 = $2,800

    That is 10% return per year with the prospect that eventually (10 years?) property prices will recover somewhat.

    If the example property recovers to $50,000 in ten years, that is another $22,000 gained ($2,200 per year) or a total return per year of $5,000 (or 17.9% per year).

    If that sort of return could be generated for 1 million properties that is another $5 billion a year growth in that market.

    Yes, it would take 2,3 or more years to establish that level of investment but the example is good for general illustration.

    So, over the nest ten years the fallout from the real estate bust could add $15 to $25 billion a year to the south Florida economy. This would be 6-10% above the current GDP for the metro region. This alone could put Miami-Dade metro area in a high ranking position. The ten fastest growing countries in the world are expected to grow between 6% and 8.5% a year over th coming decades, to give you some perspective.

    The population of south Florida is estimated to be between 5.6 and 5.8 million, and grew by 500,000 to 600,000 over the past ten years. So adding 1 million would be a significant increase in migration rates for retirees to south Florida.

    There are other factors such as overseas buyers of higher end real estate bargains which you mentioned that will bring some increase in affluent residency in the region as well.

    Now, after a long ramble, the short answer: I believe you have the correct idea - recovery from the real estate bust will probably be the dominant factor in making south Florida a top growth region in the U.S.



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