The size of the domestic markets in China and India combined with rapid GDP growth give these two economies the best growth prospects over the next two decades, according to a new global index released by risk analysis firm Maplecroft. The index, which evaluates the economic performance, stability and potential of 175 countries, ranked China and India in first and second place, respectively.

The economic performance of the other two BRIC countries – Russia and Brazil – is expected to diverge in coming years, with Brazil ranked in sixth place and Russia placing outside the top 10 in 11th place. Russia's lower position is because of a host of long-term economic challenges, including a decreasing working age population, poor legal and regulatory framework and a heavy reliance on commodity exports.

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Just one African country placed in the top 10. Nigeria was ranked in eighth position, ahead of South Korea in ninth. With Asia accounting for six of the top 10 countries Maplecroft expects the region's economies to remain strong, due to their openness to trade and capital flows, as well as their macroeconomic stability. Latin America could also be a key region to watch due to improvements in its human capital and infrastructure.

Iraq, which was ranked 22, and Myanmar, ranked 63, were both highlighted as having a high potential if current proposed economic and political reforms are implemented. Even though the reform process in both countries is still in its infancy, Maplecroft maintained that the two countries have made considerable progress. However, it pointed out that Iraq’s political instability, as well as its commodity dependence, pose its economy substantial challenges, while Myanmar suffers from poor infrastructure and low levels of health and education.

According to the index, demographic trends over the coming decades will boost output in a number of countries, including Vietnam, which was ranked in fourth place, the Philippines, which was in seventh place, and Nigeria. Population growth combined with rapid economic expansion is projected to result in significant growth of the middle classes in these countries. The Indian, Bangladeshi and Vietnamese economies are forecast to expand by up to 20% a year until 2020.