Emerging-market sovereign ratings have proved largely resilient to the US-Iran war in the first half of 2026, Fitch Ratings finds in its Global Emerging Markets Credit Brief for 3Q26, even as the conflict pushed roughly a third of EM sector outlooks to "deteriorating" following the agency's mid-year review.

Renewed closure of the chokepoints at the Strait of Hormuz in July, and continued uncertainty over a sustainable peace agreement, underscore the geopolitical and energy-supply risks Fitch says EM credit still faces into the second half of the year.

Fitch cut its 2026 growth forecast for emerging markets excluding China by 0.2 percentage points, to 3.2%, in its June Global Economic Outlook, driven partly by weaker forecasts for net oil importers including India, Poland, South Africa and Turkey.

The agency also trimmed 2026 aggregate EBITDA margin forecasts for EM corporates in some regions, as disruption at major trade chokepoints raises input costs, though it still expects margin expansion overall. Fitch's baseline assumes Brent averages $87/b in 2026, falling to a mid-cycle $60/b by 2028 as oversupply conditions resume – but warns that risks to EM issuers rise the longer Hormuz stays shut, or if strikes cause lasting damage to Gulf energy infrastructure.

The report highlights how unevenly that resilience is distributed.

The UAE (AA-/Stable) illustrates the more insulated end: its non-oil economy is expected to average 5.1% growth in 2027-28 after contracting 3.7% this year, supported by global connectivity, low taxes and heavy state spending on infrastructure, including a second Hormuz-bypassing pipeline that will lift capacity to 3.3mn b/d by mid-2027.

Egypt (B/Stable) shows how policy credibility helps: exchange-rate flexibility and sustained tight monetary policy have let it absorb moderate capital outflows without denting its rating.

Bangladesh sits at the other end – Fitch revised its (B+) outlook to Negative, citing war-linked risks compounded by limited progress addressing weaknesses in its public finances and financial sector, even as large remittance inflows and multilateral financing continue to support its FX reserves.

Beyond the war, Fitch flags El Niño as a second, compounding risk for vulnerable EM sovereigns, through potential losses to agricultural output, higher inflation, external-finance pressure, costlier food subsidies and hydropower shortages – with the potential to amplify pressure already facing Latin American agribusinesses from Iran-war-linked fertiliser supply constraints.

On the upside, the agency notes that AI-related buildouts are supporting export growth and investment in some Asian economies, though it warns a sharp correction in AI-related market expectations remains a risk of its own, one that could tighten EM funding conditions depending on its severity and duration.