The macro environment in 2023 is likely to remain volatile for emerging market debt, until global disinflation trends gather momentum and central banks shift to an accommodative stance. Yet the headwinds to the asset class from 2022 – inflation, monetary tightening, zero Covid Chinese policies and soft growth – are likely to stabilize and subside as the year advances. The decline in global macro risks from inflation as well as China’s re-opening will eventually create a supportive environment for the performance of fixed income assets, including emerging market debt.


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