EM Edge Data Watch: An odyssey to stable debt

Research evidence excerpt

EM Edge Data Watch: An odyssey to stable debt

J P M O R G A N Europe Economic Research

24 July 2026

EM Edge Data Watch

An odyssey to stable debt

EM, Economic and Policy Research

Nicolaie Alexandru-Chidesciuc

(44 20) 7742-2466

nicolaie.alexandru@jpmorgan.com

J.P. Morgan Securities plc

• General government debt stabilizing or improving in most EM Edge Katherine(1-212) 834-2285Marney

katherine.v.marney@jpmorgan.com• Fiscal consolidation and negative r-g have helped

J.P. Morgan Securities LLC

• Risks remain on fiscal consolidation fatigue and supply-side shocks Juan Goldin

• Hotspots: Tariffs, Pakistan, Kazakhstan and Venezuela (57 601) 869 8746

juan.goldin@jpmchase.com

After spiking in the 2020 pandemic year, gross government debt has seen divergent BANCO J.P. MORGAN COLOMBIA S.A

trends across advanced economies (AE), emerging markets (EM) and frontier

economies (EM Edge ex GCC, Figure 1). Government debt declined as a percent of

GDP on lower deficits in 2021 and higher inflation in 2022. After the inflation wave The EM Edge Data Watch weekly is our flagship publication providing in-depth coverage of 34

receded, deficits persisted, leading to a rise in public debt, especially in EM economies not included in our Global Data Watch.

economies. Conversely, with prudent fiscal policies (with or without the IMF The EM Edge universe is far from unified and

includes countries with widely varying per capita

cooperation) government debt in EM Edge has declined since 2023. By region, only GDP levels, economic structures and policy

the GCC and Latam deviated from this pattern (Figure 2). frameworks.

Debt levels are expected to remain stable in EM Edge this year — barring a small

decline in Asia Edge driven by Pakistan and Sri Lanka. Stabilization in debt levels is