Fitch Ratings has warned that the Iran war is adding fresh pressure on emerging market economies through higher energy import bills, supply-chain disruptions, rising subsidy costs and weaker access to international capital markets.
In a report released on April 17, Fitch said the balance of sovereign outlooks across emerging markets has deteriorated since the conflict began, with the net balance of positive and negative outlooks or watches falling to -1 from +3 before the war.
Also Read | Is India's Market Correction Overdone? Mark Matthews Weighs In On Comeback Potential Amid War
“The Iran War is creating additional challenges for many emerging market sovereigns through higher prices for energy imports, supply-chain disruptions, increased fiscal subsidy costs, pressure on exchange rates, reduced remittances and more costly and difficult access to international capital markets,” Fitch said.
The ratings agency noted that there are currently seven emerging market sovereign ratings on Positive Outlooks and eight on Negative Outlook or Watch.
Although Fitch has upgraded three emerging market sovereigns and downgraded one so far in 2026, all those actions took place before the outbreak of the conflict.
Since then, Fitch has placed Qatar and Ras Al Khaimah on Rating Watch Negative. It has also revised the outlooks on Turkey and the Dominican Republic to Stable from Positive, while changing the outlook on Indonesia to Negative from Stable.
By contrast, the outlook on Rwanda was revised to Stable from Negative.
Also Read | Stock Market Today: Nifty, Sensex Log Second Weekly Gains Amid Global Recovery From Iran War Selloff
Fitch said the war's impact is being felt across the Gulf, Asia and several import-dependent economies, with investors increasingly focused on the risks of higher oil prices, currency volatility and reduced external financing.
The report also examined the implications of the conflict for economies including China, Brazil, Hungary, Romania, Bolivia, Nepal, Kenya and Mozambique.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
