EM growth has been resilient to US import tariffs, but headwinds from fiscal tightening, softer labour markets and (for some) lower commodity prices will drag growth down over the coming year. Most of our 2026 GDP growth forecasts lie below the consensus. This is still a relatively benign picture though. Growth is slowing, not slumping. Financial risks are limited. And central banks have room to cut interest rates further – and by more than is widely expected in some EMs. That makes a constructive environment for EM financial markets, although we’re unlikely to see a repeat of the stellar outperformance earlier this year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services