- Asia remains relatively healthy, but with dispersion and mixed trends across time.
- Taiwan and Vietnam continue to rank highly, while China and India face structural debt challenges.
- LatAm continues to sit at the bottom, while several European economies have weakened across time.
- Energy exporters continue to rank well, but the unresolved Middle East war poses uncertainty.
- The risks faced by energy reliant Asia and the Gulf are understated as geopolitics is not captured.
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Click here to read the full report.
Key findings:
- Vulnerabilities in many EM economies have worsened in recent years from weaker public finances, increases in already elevated debt levels, while uneven reserve coverage for foreign obligations and exchange rate gaps persist.
- We find most Latin American economies - Brazil, Argentina, Colombia, and Chile - as well as others such as Egypt, Hungary, and South Africa sitting at the bottom of our rankings. These economies exhibit a combination of weak reserves and low coverage of foreign obligations, high government debt due to persistent fiscal deficits, unfavourable savings-investment balances, and in several cases, sizeable currency misalignments. In contrast, Peru continues to rank near the top, highlighting its resilience relative to vulnerable Latin American peers. This is underpinned by strong external metrics - high reserves coverage and low external debt – alongside low government and private debt, and a moderate savings-investment surplus.
- EM Asia continues to be relatively healthy, although dispersion remains across economies. Taiwan, Vietnam, Thailand, and South Korea rank among the strongest performers. Taiwan retains the top position, driven by a very large savings-investment surplus, strong reserves, and low public and external debt, despite elevated private debt. Vietnam’s strong #3 ranking reflects favourable external metrics, including a high savings-investment surplus, low external debt, and minimal currency misalignment, as well as low government debt, despite high private debt driven by rapid credit growth. Conversely, China, India, and Malaysia lag within Asia, mainly due to high private and/or public debt burdens. However, China and India continue to benefit from healthy external metrics, while Malaysia’s weaknesses are partly mitigated by a positive savings-investment balance, limited currency misalignment, and a narrowing fiscal deficit.
- Energy exporters remain clustered at the stronger end, including Middle Eastern economies (UAE, Qatar, and Saudi Arabia), and Russia. Their favourable rankings are supported by relatively low government debt, healthy external buffers in reserves and savings and investment surpluses, as well as generally limited currency misalignment. However, the Middle East conflict, which has yet to fully resolve despite the interim peace deal, poses uncertainty to their outlook, particularly as energy supplies are disrupted.
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The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
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Related Insights
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- Macro Insights Livestream, June 202617 Jun 2026
- China: Exports offset domestic weakness16 Jun 2026