Emerging Markets GDP Growth Forecast
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Global Outlook
Synthesized from 1,360+ institutional sources across 120 markets
Top Forecast Revisions
Largest Upgrades
Regional integration deepening and trade expansion
Reform implementation exceeding expectations
Structural reforms and infrastructure investment
Largest Downgrades
Debt sustainability concerns and fiscal pressures
Policy uncertainty and external headwinds
Cross-Cutting Themes
Multidimensional Polarization and the AI Supercycle
JPMorgan's characterization of 'multidimensional polarization' captures the defining tension of 2026: equity markets split between AI and non-AI sectors, economies balancing robust capex with soft labor demand, and widening divides in household spending. The AI supercycle is fueling record capital expenditure and rapid earnings expansion, spreading geographically across technology, utilities, banks, healthcare, and logistics (creating winners and losers in the process).
Trade Barriers, Policy Uncertainty, and the Reshaping of Global Value Chains
The World Bank's stark downgrade to 2.3% global growth in 2025 (the weakest pace since 2008 outside recessions) stems from the sharp rise in trade barriers and heightened policy uncertainty that have upended previous forecasts. All EMDE regions face downgrades relative to January projections, with East Asia & Pacific and Europe & Central Asia most exposed given their reliance on global trade.
Capital Flow Bifurcation: Quality Over Quantity in a Higher-for-Longer Rate Environment
JPMorgan's framing of 'capital flow bifurcation' toward quality over quantity defines EM financing conditions in 2026. Investment-grade markets with robust institutional frameworks attract substantial inflows (India $32bn, Indonesia $14bn, Brazil $18.5bn, Thailand $9bn, Chile $8bn), while frontier markets and high-yielders face financing constraints.
Sticky Inflation, Divergent Monetary Policy, and Currency Volatility
Inflation's persistence around 3% globally (despite unwinding of pandemic and Russia-Ukraine supply shocks) constrains monetary policy flexibility and creates divergent central bank trajectories. EM headline inflation (ex-China, Turkey) projected at 3.2% for 2026, stabilizing close to target, but considerable variation persists across economies.