Economic Outlook Emerging Markets Q3 2026: Inflationary Pressures Will Persist

Emerging market growth is projected to moderate in 2026 as inflationary pressures remain elevated despite the gradual reopening of the Strait of Hormuz. While crude oil prices have eased, refined fuel costs are expected to stay high, and rising fertilizer prices alongside El Niño could contribute to higher food inflation. These conditions are likely to keep monetary policy relatively tight across many emerging economies. At the same time, continued U.S. investment in AI infrastructure is expected to support demand for technology-related exports, benefiting several emerging Asian economies, including Malaysia, Vietnam, Thailand, and Indonesia.

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