Emerging economies defy shocks, risks still stack up: IMF
Washington
Emerging market economies have shown notable resilience despite trade disruptions, geopolitical uncertainty, and shifting global financial conditions, senior International Monetary Fund (IMF) officials said here on Thursday, while warning that risks remain tilted to the downside.
Presenting the IMF’s latest assessment ahead of a conference on emerging economies, IMF Economic Counsellor and Director of Research Pierre-Olivier Gourinchas said global growth has held up better than expected even after recent tariff shocks and heightened uncertainty.
“Global growth continues to show resilience, despite trade disruptions and heightened uncertainty,” Gourinchas said, citing the IMF’s January World Economic Outlook update, which revised the 2026 global growth forecast up to 3.3 per cent.
He said this marked the third upgrade since April last year and was stronger than projections made in October 2024.
“This is strongly suggesting that the global economy has been shaking off the immediate impact of the tariff shock,” he added. Turning to emerging market and developing economies as a group, Gourinchas said growth is projected at around four per cent over the next two years, which he described as “a solid performance by historical standards”, with upward revisions across most regions compared with October forecasts.
The assessment has clear implications for large emerging economies such as India, which have relied on strong domestic demand and improved policy credibility to cushion global shocks. Latin America, he noted, remains the main exception. He said emerging markets remain exposed to trade tensions, potential tightening of global financial conditions and elevated public debt, but highlighted major improvements in policy frameworks.
Gourinchas attributed the resilience to several offsetting forces, pointing first to “the great agility of the private sector”, which he said kept supply chains “smoothly functioning” by reorganising trade in response to disruptions.
