Fiscal Deficit Fears Give a Surprising Boost to Asian EM Bonds

Concerns over rising fiscal deficits in major economies like the U.S. and Europe are unexpectedly benefiting Asian emerging market (EM) bonds. As investors grow wary of swelling debt levels in the West, many are redirecting capital flows toward Asia, seeking safer yields and more stable fiscal outlooks. Countries such as Indonesia, India, and Vietnam are seeing increased demand for their government bonds, pushing yields lower and boosting confidence in regional debt markets. The relative fiscal discipline and stronger growth prospects in these nations make their bonds an attractive alternative amidst global uncertainties.

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