EM Debt Outlook 2025: Local Currency Bonds Lead Amid Policy Tailwinds

This monthly investment update from Schroders, led by Abdallah Guezour, provides a 12-month outlook on emerging markets debt, with fresh insights from on-the-ground research in Argentina.

• Local currency debt remains the top conviction, supported by high real yields, improving fundamentals, and renewed capital inflows.

• Argentina’s fiscal and current account stabilisation under President Milei boosts confidence in sovereign dollar bonds, despite currency concerns.

• Favourable global liquidity and subdued US dollar sentiment further reinforce the case for EM fixed income, with expected returns averaging ~11%.

Dive into the full report to explore market-by-market forecasts and conviction scores shaping the EM debt opportunity set.