Marcello Estevão · Jonathan Fortun / Institute of International Finance
Emerging market inflows increasingly reward domestic resilience rather than broad exposure to global markets. The July 2025 assessment contrasts reform momentum and disinflation with fiscal weakness, tariff exposure and currency risk. Strong local bond returns coexist with growing country differentiation, making the durability of policy frameworks central to understanding where capital goes.
Jonathan Fortun / Institute of International Finance
Debt attracted most of June’s $42.8 billion in emerging market portfolio inflows, receiving $32.9 billion compared with $9.9 billion for equities. The July tracker connects the recovery to favorable global conditions while warning that market pricing may not fully reflect the remaining risks.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
Familiar relationships between US yields, the dollar and global assets are becoming less dependable. Emerging market currencies and sovereign spreads show signs of moving independently of long US rates, while gold reflects demand for protection against institutional and geopolitical uncertainty. Stronger local bond performance points toward investors placing greater value on resilience.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
Capital continues to cross borders despite slower growth and a more fragmented policy environment. This June 2025 report finds recovering emerging market portfolio flows alongside resilient direct investment in India, Brazil and the Gulf. Currency differences and real interest rates shape returns, while institutional strength increasingly determines which economies attract investment amid trade and geopolitical uncertainty.
Marcello Estevão · Garbis Iradian · Jonathan Fortun / Institute of International Finance
The June 2025 escalation between Israel and Iran raises risks through energy prices, freight costs and financial markets. Higher insurance costs and longer delivery times expose trade vulnerabilities, while dollar demand and currency volatility pressure emerging markets. Baseline forecasts initially remain unchanged, but a downside scenario brings weaker growth and less room for monetary easing.
Marcello Estevão · Jonathan Fortun / Institute of International Finance
The June 2025 outlook projects global growth slowing to 2.7 percent from 3.1 percent in 2024. A sharper US slowdown, muted activity in Europe and Japan, and China’s reliance on policy support leave the recovery uneven. Emerging economies remain broadly resilient, but investment decisions become more sensitive to differences in domestic policy.
Jonathan Fortun / Institute of International Finance
May brought a recovery in emerging market portfolio inflows to $19.2 billion. The June release records $10.8 billion entering debt and $8.4 billion entering equities. China again drove debt flows, while continued strength in bonds denominated in local currencies provided another sign of investor demand.
Jonathan Fortun / Institute of International Finance
Rising Japanese government bond yields in May 2025 reflect monetary normalization, inflation expectations and term premiums in this assessment. A stronger yen, contained credit risk measures and solid auctions support that reading. Private investors absorb supply as the central bank steps back, suggesting an adjustment in market pricing rather than a loss of fiscal confidence.