The Global macroeconomic outlook is supportive for EM prospects, with global growth remaining resilient and inflation generally on a declining trend. EM appear more resilient.
Although the EM growth premium is peaking and moving closer to the historical average, it still favours EM, albeit with increasing fragmentation and divergence among countries.
Easier monetary policy
“EM central banks have already initiated the easing cycle and are expected to continue this trend, with few exceptions”
EM Central Banks adopted a more orthodox and agile approach in 2022 by raising interest rates and curbing inflation, positioning themselves favourably for the current easing cycle. The Fed’s ongoing easing cycle creates a favourable environment for balancing growth support with vigilance against inflationary risks for more autonomous EM countries.
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