In a world grappling with global uncertainty, investors are increasingly looking beyond traditional emerging markets toward frontier market countries to watch in 2025. With unique structural reforms, under-the-radar growth, and attractive valuations, these economies offer a wealth of high-reward opportunities for those willing to venture off the beaten path.

In this comprehensive Frontier Market Countries to Watch in 2025 guide, we’ll explore:

• Why 2025 is shaping up as a pivotal year for frontier markets

• Profiles of six compelling countries leading the pack

• What makes each one a standout frontier investment story

• Risks to consider before investing in uncorrelated, high-growth frontier economies

• Strategic takeaways for building a resilient frontier market portfolio

Why Frontier Market Countries to Watch in 2025 Are Gaining Attention

Investor interest in frontier market countries to watch in 2025 is rising for several key reasons:

• Unprecedented Market Performance — Frontier assets recorded their strongest first half since 2007, delivering 17% gains via the MSCI Frontier Markets Index, driven by countries like Vietnam, Morocco, Pakistan, and Sri Lanka.

• High GDP Growth Outlook — IMF projections show Bangladesh (6.8%), Vietnam (6.5%), Kenya (5.9%), Georgia (6.2%), Zambia (5.6%), and Kazakhstan (4.7%) among the fastest-growing frontier economies. 

• Reform-Driven Momentum — Uzbekistan’s sweeping privatizations, sovereign bond issuance, and institutional reforms make it a rising frontier star.

• Structural Appeal — Low correlations with global equities, compelling valuations (frontier trading at ~9.8x forward earnings vs emerging at ~13.5x), and inflation-beating returns enhance portfolio diversification. 

• Resilience to Global Trade Shocks — Many frontier economies are less tied to the volatility of U.S. policy shifts and emerging-market trade flows, earning a reputation for being “tariff-resistant”.

Frontier Market Countries to Watch in 2025

Let’s dive into six standout frontier market countries to watch in 2025.

1. Vietnam

With sustained GDP growth around 6.1% and a fast-emerging manufacturing sector, Vietnam is a frontier standout. A likely upgrade to emerging-market status from FTSE in early 2025 could unlock billions in passive ETF flows, adding liquidity and investor confidence.

2. Bangladesh

Projected to grow 6.8% fuelled by its booming textile and manufacturing industries Bangladesh remains one of the most compelling high-growth frontier markets of 2025. Its improving macro backdrop and record-low valuations offer meaningful upside.

3. Kenya

Kenya’s 2025 forecasted growth of 5.9%, coupled with leadership in fintech and infrastructure development, positions it as a top frontier market investment hotspot. Its regional hub status and vibrant financial sector make Kenya especially attractive.

4. Morocco

Morocco though lesser mentioned in growth forecasts is in the spotlight after strong equity performance in 2025, with stocks like Sonasid surging 160%. Its role as a gateway between Africa and Europe and economic reforms bolster its long-term appeal.

5. Pakistan & Sri Lanka

Once crisis-hit South Asian markets, both countries have delivered eye-popping market gains Pakistan up 72%, Sri Lanka up nearly 50% in H1 2025 led by reform-driven rebounds and cheap valuations. Both remain undervalued with rising macroeconomic stability.

6. Uzbekistan

Undergoing transformational change, Uzbekistan issued $1.5 billion in sovereign eurobonds, launched privatizations totaling $1.7 billion, and is scaling fintech via Click driving frontier investors to take notice.

Risks to Consider in Frontier Market Countries

Investing in frontier market countries to watch in 2025 brings elevated risks alongside reward:

• Currency & Default Risk — Some frontier economies face potential medium-term debt stress, especially with rising U.S. rates.

• Liquidity Constraints — Thin trading volumes can amplify volatility and complicate position exits.

• Political Volatility — Countries like Sri Lanka, Nigeria, and Pakistan have histories of governance shocks that sway market sentiment.

• ESG Concerns — Varying governance standards may deter Western institutional investors unless mitigated by local partnerships or blended finance. 

• Geopolitical Exposure — Uzbekistan’s landlocked geography and shifting alliances highlight frontier country geopolitics. 

Strategic Insights for Investors

To make the most of the frontier market countries to watch in 2025, consider these strategies:

1. Diversify Regionally — Blend countries like Vietnam, Kenya, and Ghana to spread risk.

2. Leverage ETFs with Discernment — Use frontier-focused ETFs for broad exposure, but supplement with targeted country picks.

3. Ride Reforms — Focus on economies where policy shifts are backed by stable governments and international support (e.g., Uzbekistan, Ghana).

4. Monitor Currency and Debt — Opt for hedged strategies or FX-aware positioning in high-risk countries.

5. Maintain a Long Horizon — Frontier recoveries often play out over years, not months.