Four macro themes for 2024 EM Outlook

EM Growth Premium

The growth premium over Developed Markets is at its highest levels in almost five years, and is expected to continue widening next year despite the global economic slowdown.

At a time when the growth outlook for advanced economies is gloomy, EM shows growth resilience for 2024, with the EM-DM growth premium remaining in favour of EM and widening to its highest gap in 5 years. At the same time, inflation is trending lower allowing for a continuation of the easing cycle that EM Central Banks initiated in 2023.

Easier monetary policy

Many EM Central Banks have already started to cut rates and further cuts are expected in 2024, supported by a disinflationary trend across EM.

The EM picture remains scattered in terms of inflation and monetary policy, reinforcing the view of EM fragmentation. However, some countries are well advanced in their monetary policy normalisation. In this such respect, LatAm launched the easing cycle, with Brazil, Chile and Peru cutting rates in 2023 amid lower inflation and a decelerating economic cycle.

Asia in Focus

Despite the China slowdown, Asia is set to register the strongest contribution to world GDP. India remains a bright spot, with the recent budget announcement for the Next Fiscal year which seeks to sustain growth and offers a stronger commitment to fiscal consolidation.

India’s next Fiscal Year Budget seeks to sustain growth and offer a stronger commitment to fiscal consolidation. Capital Expenditure continues to rise with significant investment for highways, electrification, port traffic and airports. In line with the commitment made in the budget for FY22 (Fiscal Deficit at 4.5% by FY26), the Ministry of Finance is also committing to a large fiscal consolidation in FY25: FD at 5.1% from 5.8%.

Risks to watch

For investors, there is room for optimism regarding EM assets in 2024. However, divergences across countries will persist with geopolitics increasingly under the spotlight in an election-packed year.

Geopolitics will be a crucial factor for investors to watch in 2024, amid intensifying ongoing conflicts. At the same time, 2024 will be an election-heavy year, with national elections representing over 40% of the global population (around half of the world if we also consider the European Parliament elections), including important elections in the EM space.

EM high conviction ideas


Global Head of Emerging Markets
Head of Emerging Macro Strategy, Amundi Investment Institute