IMF, KSA spotlight resilience of emerging economies

February 11, 2026 (MLN): Emerging markets are defying past patterns by weathering global economic shocks without the severe turbulence seen in previous decades.

Despite post-pandemic inflation pressures, new tariffs, and geopolitical uncertainties, these economies have maintained stable currencies, manageable debt costs, and slowing inflation, signaling a newfound robustness in the global economy.

Much of this resilience stems from structural improvements in policy and governance.

Central banks in many emerging economies have gained independence, set clear inflation targets, and reduced reliance on foreign exchange interventions. Fiscal discipline has strengthened through the adoption of rules limiting budget deficits.

In Brazil, for instance, inflation-targeting policies introduced in 1999 helped the country tackle pandemic-driven price surges, with expectations now set to reach a 3% inflation target next year, as reported by Arab News.

Nigeria has reformed its energy pricing system and reduced central bank financing of deficits, while Egypt is broadening its tax base and modernizing tax administration.

However, experts caution that favorable conditions alone such as low interest rates, strong commodity prices, and easy financial conditions have contributed to recent gains, and caution against complacency.

Economic growth in emerging markets remains below pre-pandemic trends, challenging the goal of narrowing the income gap with advanced economies. Structural shifts in trade, technology, and demographics may also complicate efforts to accelerate growth.

Policymakers are urged to focus on reforms that support sustainable, job-rich growth.

Measures include improving the business climate to attract both domestic and foreign investment, strengthening institutions, deepening financial markets, and preparing workforces for emerging technologies like artificial intelligence.

Infrastructure investments in countries like India and Saudi Arabia are setting the stage for long-term productivity gains, while frontier markets with young populations could leverage this demographic advantage if education and skills development are prioritized.

Regional cooperation is emerging as a key strategy for boosting growth and resilience. From Southeast Asia to Africa and Latin America, countries are forging stronger trade links and financial partnerships, signaling a shift toward new forms of economic integration.

These trends were highlighted at the recent AlUla Conference for Emerging Market Economies in Saudi Arabia, where leaders Mohammed Al-Jadaan, Minister of Finance of Saudi Arabia and Kristalina Georgieva, Managing Director of the International Monetary Fund emphasized continued collaboration, open markets, and robust policies to navigate global volatility while promoting prosperity.

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