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.
Many EM economies have seen their debt position, cover for foreign obligations, and savings-investment balance weaken in recent years. Asia looks relatively healthy vs EM peers, despite China's structural challenges. Taiwan, South Korea, and most of ASEAN have some of the best scores in Asia.
LatAm has constantly had the worst scores, while several European economies have weakened across time. Energy exporters rank well amid the hydrocarbon windfall in recent years, but face downside risks. Geopolitical risks from tariffs to regional conflicts continue to linger. The analysis, by not capturing these, perhaps understates the downside risks faced by trade reliant Asian economies and energy exporters.
Latest update: June 2025
Source: BIS, CEIC, IIF, IMF, DBS Research. Note: Indicators are in % of GDP, unless otherwise stated.
Findings
- EM vulnerability indicators have worsened in recent years, as the debt position, cover for foreign obligations, and savings-investment balance have slipped in many countries.
- We find Egypt, Brazil, South Africa, Chile, Hungary, and Türkiye at the bottom of our rankings. They feature weak reserves and low coverage for foreign obligations, high fiscal deficits and debt levels, unfavourable savings-investment gaps, and some degree of currency misalignment.
- EM Asia looks fairly healthy: Taiwan, South Korea, and the major Southeast Asian economies (Vietnam, Indonesia, Thailand, Philippines) have some of the best scores in the region. Taiwan has consistently led EM rankings, due to high savings-investment surpluses, which contributed to robust reserves, alongside low government and external debt, despite high private debt. China, India, and Malaysia rank lower due to their weaker fiscal metrics, notably government debt, and high private debt. However, China and India have healthy external finances, partially offsetting their fiscal weaknesses, while Malaysia’s vulnerabilities are partly mitigated by sustained domestic demand, and ongoing structural business and fiscal reforms.
- At the better end of the spectrum are energy exporters, such as UAE, Russia, Saudi Arabia, and Qatar. Their favourable rankings are broadly due to low government and external debt, healthy savings-investment surpluses and external buffers, alongside minimal currency misalignments. While they have benefitted from the hydrocarbon windfall in recent years, the 2025 decline in oil prices and the risks of a broader Middle East conflict pose challenges to their resilience.
- Peru consistently sits near the top of our rankings due to its strong track record of macroeconomic stability, a stark contrast to several major Latin American economies facing significant vulnerabilities. This stability mitigates risks associated with high commodity dependence, and is reflected in solid external metrics (high reserves cover for foreign obligations amid low external debt), as well as low government and private debt levels.
Source: BIS, CEIC, IIF, IMF, DBS Research
Findings
- Argentina, Brazil, Chile, Colombia, Egypt, Hungary, Pakistan, South Africa, and Türkiye have had some of the worst vulnerability scores in this study. While Argentina and Pakistan have shown recent improvements, it would be vigilant to monitor potential downside risks given their historical weaknesses in public and external finances.
- Egypt was at the very bottom of our rankings in 2024, little changed from 2023. This reflected weak public finances (wide fiscal deficit and high government debt), poor external metrics (low reserves to cover foreign obligations despite manageable external debt, coupled with wide current account shortfall), as well as sizeable currency misalignment. While the IMF noted some signs of macroeconomic stabilisation following its May 2025 review mission, the full impact of ongoing reforms will take time to materialise.
- Brazil’s vulnerability ranking worsened noticeably, falling to 26 in 2024 from 21 in the preceding three years. This decline was due to increasing government debt (due to persistent budget deficits), rising private debt, a widening current account shortfall, and declining foreign reserves as a % of GDP, reducing cover for foreign obligations, despite contained external debt.
- In Asia, China has slipped, largely owing to the massive debt build-up in both the private and public sectors. Within ASEAN, the Philippines and Thailand have dropped, due to weaker public finances and savings-investment balances. Conversely, Vietnam has climbed owing to broad-based progress. Indonesia has also improved over time, due to lower external and private debt, and despite manageable government debt, investors currently express concerns about fiscal uncertainty. India and Malaysia have not moved much.
- Several European economies have deteriorated over the years. Hungary and Czech Republic have weakened, due to worsening public finances, reduced reserves coverage of foreign obligations, and increasing currency misalignments. Poland has dropped in recent years, due to widening fiscal deficits (leading to higher government debt), and larger currency misalignments, outweighing improvements in private debt and the savings-investment balance. The dispersion of rankings is wide, with Russia and Türkiye situated at opposite ends of the vulnerability spectrum.
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.
