EM Debt Outlook 2026: Momentum Continues

William Blair845 FollowersFollow5ShareSavePlay(14min)Comment(1)SummaryEmerging markets (EM) debt enters 2026 with its momentum intact, supported by the same forces that powered a strong 2025: resilient growth, improving balance sheets, attractive real yields, and steady investor inflows.The macro backdrop remains constructive, with EM economies showing stable fiscal dynamics, healthier external accounts, and moderating inflation that gives central banks room to ease.We believe valuations across hard-currency and local markets remain compelling, while supportive technicals—limited net issuance and renewed demand from global fixed-income investors—create a favorable foundation for the year ahead.Against this setting, we believe EM debt is positioned to deliver another year of solid performance, with opportunities spanning hard and local currency (including frontier markets) debt and corporate debt. Maria Vonotna/iStock via Getty Images Momentum continues in EM debt, and we believe the forces behind it haven’t faded. Solid growth, improving balance sheets, attractive real yields, and renewed inflows have carried strength from 2025 into the year ahead. But first let’s look back atThis article was written byWilliam Blair845 FollowersFollowWilliam Blair is committed to building enduring relationships with our clients and providing expertise and solutions to meet their evolving needs. We work closely with the most sophisticated investors globally across institutional and intermediary channels. We are 100% active-employee-owned with broad-based ownership. Our investment teams are solely focused on active management and employ disciplined, analytical research processes across a wide range of strategies. We are based in Chicago with resources in New York, London, Zurich, Sydney, Stockholm, and The Hague, and dedicated coverage for Canada.