Principles for Stable Capital Flows and Fair Debt Restructuring: PCG Implementation Note

Emerging markets and developing economies (EMDEs) have shown strong resilience in 2025 despite record policy uncertainty, trade disruptions, and rising geopolitical tensions. Softer global financial conditions, a weaker U.S. dollar, and more accommodative monetary policies have boosted capital flows and supported EMDE debt issuance—now at its highest level since 2020. While the overall EMDE sovereign outlook has improved, vulnerabilities persist.