An emerging market is an economy moving from developing toward developed status — with rising incomes, deepening financial markets and growing global trade, but not yet the stability of an advanced economy. China, India, Brazil, Mexico and Indonesia are the biggest examples. Together, emerging and developing economies produce over 40% of world GDP.
What is an emerging market?
An emerging market is an economy in transition — more advanced than a low-income developing country, but not yet a stable, high-income developed one. These economies have rising incomes per person, expanding stock and bond markets and deeper links to global trade, alongside higher risk and volatility. There is no single official list; index providers and the IMF each define the group differently.
How are emerging markets classified?
Three gatekeepers dominate, and their lists do not fully agree. MSCI includes 24 countries in its Emerging Markets Index, covering about 1,205 companies (MSCI, 2026). FTSE Russell splits emerging markets into “advanced” and “secondary” tiers. The IMF uses a much broader group of “emerging market and developing economies.” The biggest emerging markets by size are China, India, Brazil, Mexico, Indonesia, Saudi Arabia, Taiwan and South Africa.
The classifications can even disagree about the same country. South Korea is treated as a developed market by FTSE Russell and S&P but is still classified as emerging by MSCI, which cites limits on trading its currency (CNBC, 2026) — the clearest case of one country, two answers.
Why emerging markets matter
Emerging economies are the engine of global growth. The IMF expects them to expand by just over 4% in 2026, against about 1.5% for advanced economies (IMF, April 2026). They already account for roughly 41% of world GDP in nominal terms — and a majority of the world’s population — which is why investors treat them as essential, if riskier, holdings.
Key takeaways
- Emerging markets are economies transitioning from developing to developed status.
- MSCI lists 24 emerging-market countries; the IMF uses a broader grouping.
- They grow faster — ~4% vs ~1.5% for advanced economies in 2026 (IMF).
- South Korea shows how classifications differ: developed to FTSE, emerging to MSCI.
Frequently asked questions
Is China an emerging market?
Yes. Despite having the world’s second-largest economy, China is classified as an emerging market by MSCI, FTSE Russell and the IMF, because of its income level and limits on financial-market access. It is the largest single emerging market.
Why does MSCI call South Korea emerging when FTSE calls it developed?
The providers weigh criteria differently. FTSE and S&P reclassified Korea as developed in 2009, but MSCI still lists it as emerging, citing restrictions on trading the won and on foreign-investor access (CNBC, 2026).
What is the difference between emerging, frontier and developed markets?
Developed markets are high-income and highly accessible; emerging markets are middle-income and moderately accessible; frontier markets are smaller, less liquid and harder to invest in. Countries can be promoted or demoted between tiers over time.
Sources
- MSCI, Emerging Markets Index — retrieved 2026-07-04 — msci.com
- IMF, World Economic Outlook, April 2026 — retrieved 2026-07-04 — imf.org
- LSEG (FTSE Russell), Country classification, September 2025 — retrieved 2026-07-04 — lseg.com
- CNBC, South Korea and MSCI emerging-market status, 2026 — retrieved 2026-07-04 — cnbc.com
Last updated: July 4, 2026
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