EM GDP growth picked up in the second half of 2024 but faces headwinds this year from tight policy at home and challenges abroad. Our growth forecasts generally sit below the consensus. Monetary easing will continue but, outside Asia, high inflation means that interest rate cuts will be smaller than most expect.
If US president Trump pursues a reciprocal tariff threat, it is likely that EMs would suffer a greater loss of competitiveness than DMs. EMs do at least generally look well placed to weather an environment of a stronger dollar and higher US Treasury yields.
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