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How stable do emerging markets look now, in 2023? Which countries would be most and least resilient if another global adverse shock were to happen? A simple indicator constructed from a small set of economic and institutional variables was able to identify in 2019, prior to the COVID-19 pandemic and subsequent global shocks, those emerging markets and developing economies (EMDEs) that would be most economically and financially affected if an external shock were to materialize. Now, I update the Indicator for emerging markets in 2023.

A year ago, the International Monetary Fund (IMF) announced that an alarming 60 percent of developing countries and 25 percent of emerging market economies were either in debt distress or at severe risk of default. The confluence of severe shocks in the period 2020-22, starting with the COVID-19 pandemic and followed by Russia’s invasion of Ukraine and interest rate hikes in advanced economies, left many emerging markets and developing economies (EMDEs) struggling to meet their external obligations.

This paper uses a straightforward Resilience Indicator, constructed from a small set of economic and institutional variables, to show that by 2019, prior to the COVID-19 pandemic and subsequent global shocks, it was possible to identify emerging markets and developing countries that would encounter serious economic and financial problems if an external shock were to materialize.