Four macro themes for 2024 EM Outlook

EM Growth Premium

Next year, EM growth is expected to decelerate on average to 3.6% from around 4% this year. Importantly, the growth premium in favour of Emerging Markets over Developed Markets is projected to continue widening.

The downturn in China has been offset by higher forecasts for LatAm (Brazil and Mexico), India and Indonesia. At the same time, the 2024 growth outlook for advanced economies is gloomy.

Easier monetary policy

A lower growth environment is expected to limit inflationary pressures. The group of Emerging Market central banks that have started easing their policies is growing.

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. LatAm has already embarked on an easing cycle, with Brazil, Chile and Peru cutting rates in the previous months amid lower inflation and decelerating economic cycles.

Asia in Focus

Asia is set to register the strongest contribution to world GDP once again, despite China’s slowdown resulting in growth below 4% in 2024. India’s growth is also expected to decelerate slightly to a 6%-6.5% range, still above its potential growth rate.

The ongoing reallocation process of supply chain de-risking and net zero or technological transition should continue to direct investments towards Asia, which should become one of the EM winners in a more fragmented world.

Risks to watch

For investors, there is room for optimism regarding EM equity in 2024. The asset class is poised to benefit from an improving growth premium and increasing exports, leading to a better earnings outlook. However, divergences across countries will persist.

Fragmentation within Emerging Markets remains high amid ongoing geopolitical tensions and different economic dynamics across regions and countries. The vulnerability ranking shows Eastern European countries are the most vulnerable, whereas LatAm and Asia are more resilient.

EM high conviction ideas


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