How We Crunched Numbers to Rank Emerging and Frontier Markets

To compile the ranking of the most promising emerging and frontier markets for investors that will be published in the March issue of Bloomberg Markets magazine, countries were awarded points based on their relative performance in each of more than a dozen areas.

The worst-performing country received zero points, while the best-performing country received the maximum number of points assigned to that category. Scores for all variables were summed, with a range for the final score being 0 to 100.

For the frontier markets, which are generally less developed than emerging markets, greater weight was given to the macroeconomic forecast data from the International Monetary Fund. Liquidity data for Botswana’s equity market weren’t available, so we gave Botswana the median score of all other countries.

The areas we looked at included IMF forecasts for 2013 to 2017 for GDP growth, inflation, government debt and total investment. We also measured demographic and economic development data using current figures from the World Bank and the International Energy Agency on literacy rate, age of population, labor participation and electricity consumption.

For financial markets, we used Bloomberg data on the price- earnings ratio of the equity market, liquidity and currency volatility.

Last, we included each country’s position in three outside rankings: the World Bank’s Ease of Doing Business Index, Transparency International’s Corruption Perceptions Index and the Wall Street Journal/Heritage Foundation’s Index of Economic Freedom.

The frontier-markets ranking also included net energy imports as a percentage of total energy used. This World Bank figure helps determine the countries’ vulnerability to energy price swings. Countries that rely heavily on energy exports or imports were considered higher risk and therefore earned fewer points for this category.

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To contact the editor responsible for this story: Laura Colby in New York at

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