Politics centre stage

In a quiet month for economic news across frontier markets, politics has provided a regular stream of headlines. Investors were buoyed by results from Argentina’s primary elections which showed that support for President Macri’s coalition had held up better than expected and raised expectations that he will be able to push ahead with reforms. Elsewhere, markets in Kenya rallied after the country avoided the violent post-election unrest that many had feared. And Angola elected a new president for the first time in 38 years, prompting hopes of a welcome shake-up of policy. But we doubt that these developments will translate into a significant improvement in the economic outlook. Mr. Macri has a mountain to climb to tackle Argentina’s growing fiscal vulnerabilities. Meanwhile, as head of the ruling party, Angola’s former president José Eduardo dos Santos still holds significant policymaking clout, thus limiting the new president’s room for manoeuvre. And news in other frontier economies has been far from positive. Venezuela’s crisis has shown little sign of abating after President Maduro pressed ahead with the formation of an allpowerful constituent assembly. The US slapped fresh sanctions on the country in response.