EM Meta-Forecast: Q1 2026

Editor's Note: Consensus ≠ Comfort

As 2025 closed, emerging markets analysts entered the new year with an unusual degree of agreement. Across the 27 institutional outlooks synthesized in this report, forecasters cluster around GDP growth of 3.5 to 4.0%, a spread of just 0.7 percentage points and the narrowest range in five years. India stands apart with near-universal bullishness around 6.5% growth. Latin America, by contrast, is expected to expand by a modest 2.1%.

At first glance, the tight consensus suggests clarity. History counsels caution, however. When forecasts converge this closely, markets tend to be vulnerable to surprises. The last time emerging-market projections aligned so neatly, it was on the eve of the pandemic.

Much of today’s optimism rests on a familiar framing. “Quality” emerging markets such as India, Indonesia and Mexico are treated as relative safe havens. In reality, they are increasingly expensive and crowded trades that depend on continued policy execution, benign global financial conditions and steady external demand. They may offer relative value within the asset class, but they do not offer immunity from shocks.

The more interesting opportunities may lie where there is less consensus. Frontier markets, countries emerging from credit restructuring, and countries written off by mainstream allocators offer asymmetric potential for patient capital. Tanzania’s long-delayed LNG ambitions, Uzbekistan’s post-isolation opening, and Ghana’s recovery after debt restructuring illustrate the point. Risk is higher, but entry points are less crowded and upside is clearer if reforms hold.

This distinction matters because emerging markets represent dozens of distinct country narratives, increasingly obscured this year by homogenized optimism. The AI infrastructure build-out will create winners in unexpected places, favoring commodity suppliers and energy exporters as much as software hubs. Higher-for-longer interest rates will reward credible reformers and penalize those still reliant on cheap capital and external goodwill.

The implication for investors is straightforward but demanding. 2026 is unlikely to reward broad, index-level exposure. It will favor selectivity, institutional judgment, and a willingness to diverge from consensus. The opportunities are real. So are the risks. Distinguishing between countries with durable institutions and reform momentum and those vulnerable to external shocks will be decisive.

The story, then, is not that emerging markets are “back.” It is that some emerging markets, in some sectors, under specific conditions, offer value. Finding them requires work, skepticism, and a deliberate refusal to mistake consensus for conviction.

— Dan Keeler
FMN founder and executive editor

Countries We’re Watching

• Indonesia: ASEAN’s strongest case. Credible central bank, nickel exposure, less crowded than India. Attractive valuations and improving current-account dynamics.
• Vietnam: Capacity constraints emerging after years of investment inflows. Labor-market tightness and infrastructure bottlenecks create near-term headwinds, but room for expansion remains.
• Uzbekistan: Frontier opening with reform momentum. High risk, high potential. Post-isolation liberalization creating opportunities in textiles and agriculture.