Emerging countries: Economic growth remains solid but is not enough to stabilise public debt

Growth in emerging economies has remained solid since the beginning of the year, thanks in particular to buoyant exports and easing financial conditions. Up until the summer, the front-loading of purchases in anticipation of tariff increases in the United States stimulated trade. In addition, global trade flows have been reorganised. In 2026, fiscal and monetary policies will continue to support growth, but will be more constrained. Monetary easing will be less pronounced than in 2025, if only because of the uneven pace of disinflation across countries. Fiscal policy will be constrained by the need to curb the growth of public debt ratios. On the one hand, the gap between the effective interest rate and GDP growth, which has generally been negative until now, will narrow to zero or even reverse. On the other hand, for many countries, primary budget deficits will remain high even if they decline in the medium term. In China, Poland and Saudi Arabia, where the debt-to-GDP ratio is expected to increase the most by 2030, there are several specific but harmless reasons for the high primary deficits. For South Africa, Brazil, Colombia, and Mexico, the situation is more problematic. Finally, the countries with the largest declines in public debt ratios (Argentina, Egypt and Ukraine) are those with IMF support agreements.

Solid growth performance driven by robust exports and easing financial conditions

Growth in emerging economies has remained solid since the beginning of the year. Aggregate real GDP growth in our sample of 28 major emerging countries[1] was slightly above 1% quarter-on-quarter in Q1 and Q2 2025. For Q3, available GDP data confirm the resilience of Asian economies.

According to our forecasts, average real GDP growth in emerging countries for 2025 as a whole should come in at 4.1%, just below its 2024 average (+4.2%). We have revised this forecast upwards (+4 pp) compared to the forecast made in the aftermath of President Trump's “Liberation Day” (2 April) and the first wave of US tariff increases. In fact, exports have been much less affected by the tariff shock than expected. Global trade has held up well and is even expected to rebound over the year as a whole. In its October World Economic Outlook (WEO), the IMF forecasts a 3.7% increase in the total volume of goods exports in 2025, following +3% in 2024.

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