Global macro shifts: can emerging markets navigate a fragmented world?

As the world fragments and realigns geopolitically, emerging markets have benefited from these global shifts, analysts at Franklin Templeton show.

While the US and China remain the two largest world trading hubs, most emerging markets have not singularly aligned with either. Trade diversification, Franklin Templeton demonstrates, may be an economically positive outcome of the new tariff regime.

This is due to reshoring, as well as decades of structural reforms and sound economic policy. Franklin Templeton presents the evolution of funding and current account financing. It finds that reserves adequacy of emerging markets compared to imports has significantly improved since crisis periods. Though emerging market debt servicing costs have been rising over the past decade, sovereign defaults have slowed.

Due to consistent commitment to reforms, as well as “savvy positioning within a multipolar world”, Franklin Templeton expects certain emerging markets to be able to continue to benefit during the realignment of global political and trading blocs. 

Download the white paper, Global macro shifts: can emerging markets navigate a fragmented world?

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