DBS Country Risk Heatmap
Assessing EM macroeconomic risks
Welcome to DBS Country Risk Heatmaps. We showcase a cross section and a time series heatmap of a wide range of macro health indicators of 27 major emerging market economies. You can toggle between the Cross section and Time series tabs below to access the two heatmaps. The dynamic visualisations provide overall rankings to identify relative risks going forward using latest available data. In the time series heatmap, we provide the evolution of overall rankings over the past six years.
Vulnerabilities in many EMs have worsened in recent years, driven by rising debt concerns, amid uneven reserves coverage and FX gaps. 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. Geopolitical risks from conflicts to tariffs persist. The analysis, by not capturing these, perhaps understates the downside risks faced by energy reliant Asian economies and Gulf economies.
Latest update: June 2026
Source: BIS, CEIC, IIF, IMF, DBS Research. Note: Indicators are in % of GDP, unless otherwise stated.
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.
Source: BIS, CEIC, IIF, IMF, DBS Research
Findings
- Argentina, Brazil, Chile, Colombia, Egypt, Hungary, and South Africa continue to record some of the weakest vulnerability scores over time. While Pakistan and Türkiye have improved notably over the past two years due to reductions in their savings-investment shortfalls, various debt metrics, and fiscal deficits, risks remain given historically low reserves and coverage for foreign obligations.
- Egypt remains at the bottom of the rankings, relatively unchanged from 2024 and 2023. The persistent weakness reflects poor public finances - a large fiscal deficit and high government debt - alongside weak external buffers, ongoing current account pressures, and significant currency misalignment. While some stabilisation efforts are underway, structural vulnerabilities will take time to improve.
- Brazil's vulnerability remains elevated, unchanged from 2024, and weaker than in earlier years. This reflects persistently wide fiscal deficits, high and rising government debt, elevated private debt, continued external deficits, and moderate currency misalignment.
- Within Asia, trends over time remain mixed. Vietnam has improved steadily to its current ranking, driven by broad-based progress. Thailand's position has also improved, underpinned by stronger external metrics and lower private debt, despite rising overall public debt used to support lagging growth. Indonesia has slipped after a few years of stability, as public finances weakened and currency misalignment widened, while Malaysia has not shifted materially. China has gradually weakened over the past three years, driven by high and rising private debt and worsening public finances, despite strong external indicators. India's ranking has remained broadly stable, driven by steady reserve metrics, and improvements in the savings-investment balance and public finances, despite higher external and private debt.
- Several European EMs have shown continued deterioration in recent years. Hungary remains among the weakest, reflecting high external debt, a weak fiscal position, and low reserves coverage of foreign obligations. Poland has weakened over time, primarily due to rapidly deteriorating public finances due to high defence and social spending, as well as significant currency misalignment from appreciation, which has offset improvements in private debt and stable reserve metrics. Czech Republic looks relatively stable amid steady reserves, savings-investment surplus, and fiscal indicators, although higher external debt and elevated REER misalignment could pose risks. Dispersion remains wide, with Russia at the stronger end and Hungary and Poland at the weaker end, while Türkiye has improved notably from prior years.
Notes
- The eight indicators in the heatmap are foreign exchange reserves, fiscal balance, private and public sector debt, external (hard currency) debt, savings-investment balance, gross external funding requirement, and real effective exchange rate (REER).
- The vulnerabilities are assessed in simply ordering, except for REER:
If country A's debt if higher than country B's debt, A scores poorer than B. - For REER, the absolute deviation of REER from long-term trend is used to capture risks from over/undervaluation.
- Annual data provide the depth and breadth to monitor macro vulnerabilities that build up steadily over time.
