Recently released data support our view that emerging markets will – the Gulf economies aside – ride out the energy shock pretty well. At the same time, inflation pressures look contained and are likely to remain so, despite upside risks from heatwaves and El Niño. Central banks have largely refrained from tightening further in the past couple of months and we think the bias is likely to shift back towards interest rate cuts later this year and into 2027. We see scope for sizeable cuts in Brazil, Colombia and South Africa by the end of next year.
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