Emerging markets draw record debt inflows as investors diversify
MacroDigital Finance
Emerging markets are attracting record debt inflows as investors diversify away from U.S. assets, with foreign investors pouring $214.4 billion into emerging market debt through July, up from $177.7 billion a year earlier. Emerging market nations sold roughly $19 billion of bonds in July, twice the decade average, pushing year-to-date issuance to a record $187 billion. Analysts credit improved policymaking, stronger foreign exchange reserves, and deeper local capital markets for cushioning developing economies from global shocks. Local-currency sovereign bonds outstanding totaled roughly $13 trillion by end-2024, compared with about $1.4 trillion of international hard-currency sovereign debt, according to JPMorgan and UBS. Investors warn that food inflation and El Niño impacts remain key risks, but many expect emerging market local debt to outperform through year-end.
