Emerging Markets
Emerging markets encompass regions with significantly diverging fundamentals and a broad range of credit challenges—from persistent inflation and tightening financing conditions to sluggish domestic demand and geopolitical tensions.
How We Rate Emerging And Frontier Markets
Emerging and frontier markets are strategically positioned to drive global economic growth through the expansion of their domestic markets.
Emerging and frontier markets will play a crucial role in shaping the global economy and driving growth, contributing approximately 65% of global economic growth by 2035. Frontier markets will play a prominent role in this growth due to their favorable demographics—but face significant challenges from persistently high inflation and political uncertainty.
Monthly Highlights
Food Prices Could Be The Next Driver Of Inflation
Inflation pressures are broadening. Energy-driven price spikes are lifting headline inflation, while delayed passthrough from surging fertilizer costs is likely to push food prices higher, keeping inflation elevated even as fiscal measures contain fuel costs in some countries.
African economies are highly exposed to food price shocks. Higherfood expenditure and heavy import dependence amplify the pass-through from global prices, making food inflation the main driver of headline pressures.
Risky credits edge lower as issuance remains selective. The number of 'CCC+' issuers has declined slightly, with no new issuance at this level in 2026. Improving financial ratios point to gradually stronger fundamentals despite cautious investment conditions.
Sustainable bond issuance is led by Mexico, Chile, and Brazil. Corporations drive diversification and product innovation across instruments, while green bonds remain the largest share of cumulative issuance.
Emerging market (EM) benchmark yields partially retracted in May following the March repricing linked to the Middle East war, with dispersion across regions remaining elevated and notable outliers such as Türkiye. Financing conditions have stabilized but remained tight across EMs amid persistent downside risks, while primary markets reopened selectively outside China with activity mostly in LatAm. China remained the main driver of issuance volumes.
Latin America
June 08, 2026
Rising Governance Failures In Latin America Weigh On Creditworthiness
S&P Global Ratings analyzed over 50 high-profile governance failures that have occurred among corporates and financial institutions in Latin America since 2015. Most of these were from Brazil, followed by Mexico and Chile.
Still, we don't see governance weakness as a sector-specific or systemic risk in Latin America, but as insulated cases.
EM EMEA
Maritime chokepoints around the Middle East
June 25, 2026
Credit Conditions Europe Q3 2026: Resilient Through Stormy Waters
Overall: Europe’s credit conditions remain resilient, helped by adaptable businesses and constructive financing markets, but the macro outlook is lackluster. Growth is likely to stagnate in the second half of 2026, while energy-driven inflation continues to weigh on central banks and borrowers.
Risks: Downside risks are evolving rather than disappearing. Key pressure points include potential for renewed Middle East energy disruption, rising EU-China trade frictions in strategic sectors, spillovers from higher long-term yields, and AI-enabled cyber threats that could test operational resilience across sectors.
Ratings: Rating actions broadly remain aligned with underlying credit fundamentals. Banks, insurers, and structured finance show resilience, while pressure is more concentrated among lower-rated borrowers and weaker sectors, including autos and chemicals, and issuers facing refinancing needs.
EM Asia-Pacific
Credit Conditions
June 25, 2026
Credit Conditions Asia-Pacific Q3 2026: Hormuz Reopens, Fragility Remains
The reopening of the Strait of Hormuz would lower tail risk, but supply normalization will be uneven and costly. Second-order shocks could cause more credit pains.
Tighter monetary policy to stem inflation could come amid capital outflows, potentially at the expense of growth. Additional policy support may narrow fiscal space.
AI-demand is cushioning Asia-Pacific's growth from a supply shock, but overlapping strains will widen the credit gap. Prioritization of supply security over cost could drive a structural rewiring of trade flows.
Frontier Markets
Sovereigns
29 April 2026
Frontier Markets Quarterly Highlights: The Growing Risk Of A Prolonged Energy Shock
The Middle East war is posing a threat to frontier markets (FMs) on three fronts--energy, food, and financing. The effective closure of the Strait of Hormuz has cut about 20% of global oil/liquefied natural gas (LNG) supply and one-third of fertilizer trade, pushing fuel prices above 2022–2023 highs. Central banks poised to ease are now boxed in by costpush inflation.
The food crisis is building on a delayed fuse. Price pass-through lags of six to 18 months mean the worst hasn't hit the consumer price index (CPI) yet. 72 countries worldwide import basic food inputs worth over 1% of GDP--low-income net importers face compounding pressure on food security, external balances, and social stability.
Markets are pricing in de-escalation, but the margin for error is thin. FM spreads are about 36% below the three-year average with respect to December. Issuance was strong around $100 billion through the first quarter, but about $140 billion in maturities loom. Senegal's risk premium has surged to 1,458 basis points (bps) with no IMF program in sight.