Emerging Markets Outlook 2H 2026/1H 2027
Regis Chatellier: Head of EM Sovereign Strategy
9 July 2026
- How inflation shocks and energy market disruption could reshape emerging market growth and credit conditions.
- What weakening external balances and trade uncertainty may mean for sovereign risk profiles.
- Why sovereign bond valuations appear stretched despite resilient investor demand and attractive yields.
- How fiscal discipline and debt dynamics differ across regions, creating diverging credit trends.
- Which countries may benefit from improving fundamentals as markets reassess sovereign opportunities.
Executive Summary
Emerging markets face renewed challenges from inflation and external pressures. Growth conditions remain uneven across regions.
Fiscal resilience remains stronger than many developed economies. Debt burdens continue to require careful monitoring.
Sovereign financing activity stays robust amid persistent investor demand. Funding conditions remain broadly supportive across markets.
Meanwhile, external balances face pressure from trade and energy disruptions. Reserve positions generally remain manageable.
Ultimately, credit fundamentals vary significantly among sovereign issuers. Market performance may depend on evolving macro conditions.
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