Top 5 Highest-Rated Emerging Markets in 2023

High-risk, high-return investment in developing economies can be tempting, so what are the best emerging markets to keep an eye on in 2023?

Photo credit: Shutterstock / SL-Photography

Economies in transition rely heavily upon foreign investment to implement their ambitious development objectives.

And if all goes according to plan, investors who chipped in will be rewarded by receiving a handsome return on investment (RoI) well above the prevailing rates in global financial markets.

Developing economies, however, are also more prone to unexpected problems such as political instability, sudden changes in regulations, and fluctuations in exchange rates.

Investment in developing economies, in short, is a high-risk, high-return strategy.

And while there are no foolproof ways to completely tame risk—enemy of even the best laid plans—there are ways to more wisely select an investment market.

One of the best indicators to look at before committing to anything is a variable known as “country risk,” which takes into account factors such as political stability, the soundness of regulatory frameworks, and the overall quality of the business environment in a given country.

Some well-known country risk ratings include the Economist Intelligence Unit (EIU) and the IHS Country Risk ratings.

Alternatively, one can look at so-called credit ratings of target markets, which are reflective of the ability of a given government or business to honor its debts.

Credit ratings such as Moody’s index or Standard and Poor’s index (S&P) are reliable predictors of a country’s worthiness for investment.

Below is a selection of five developing economies with promising credit ratings and reasonably low country risks. Naturally, none of these markets have an outstanding triple A rating, in which case they would not be a developing market.

What has landed these countries in this list is their business friendliness and—more importantly—the direction in which their overall investment rating is moving compared to previous years.


Mexico has long welcomed foreign investment, especially from its wealthy northern neighbor, the US. In 2021, alone, American investments in Mexico exceeded the whooping sum of USD110 billion.

The investment climate of Mexico is diversified, with no single sector absorbing the majority of the inflow.

As of 2022, Mexico has the respectable—though not perfect—S&P rating of BBB, which means the country has an “adequate” financial landscape. The important point, however, is that the Mexico’s credit rating will likely be upgraded to BBB+ soon.


Morocco has an open attitude to investment, which is helped by the country’s longstanding political stability.

“Morocco actively encourages and facilitates foreign investment, particularly in export sectors like manufacturing,” in the assessment of the US Department of State. French business, meanwhile, continues to be the leading European investors in the kingdom.

The North African economy has an S&P rating of BB+, which indicates the presence of only minor financial uncertainties, and the plus means that the prospects for overcoming the existing issues are good.


Azerbaijan is a popular market for international investors, especially in the energy sector.

However, thanks to the accumulation of oil revenues, the country is itself on the lookout for investment opportunities abroad in non-petroleum sectors.

Azerbaijan is pursuing a reciprocal investment strategy, especially with Turkey, some CIS countries, and the EU.

The republic of Azerbaijan was upgraded to BB+ by the S&P Global Ratings. Another provider of international investment ratings, Fitch Ratings, has “upgraded the outlook from ‘stable’ to ‘positive.’


The inflow of foreign investment in Panama is primarily absorbed by the real-estate sector, through the Panamanian stock exchange market is also a popular gateway to invest in many promising businesses based in the country.

With an S&P rating of BBB, Panama enjoys an adequately stable financial outlook. The country was previously assigned the rating of BBB+, but was downgraded in 2020 due the financial crisis that followed the pandemic.

In 2023, however, “Panama has instituted critical reforms to improve its technical and institutional capacity to manage the disaster risk resulting from natural and health-related hazards,” according to the World Bank.

This will hopefully lead to an upgrade in credit ratings soon.


The Sultanate of Oman has been encouraging investors through various campaigns launched by the government.

“Invest Oman is the official investment marketing initiative for the sultanate. [The initiative is] Managed by Ministry of Commerce, Industry & Investment Promotion (MOCIIP),” according to the Omani government.

The country is one of the most politically and economically stable states in the MENA region, leading to some comparisons between its status in the Middle East and that of Switzerland in Europe.

The Gulf country’s S&P rating of BB is solid enough, while other financial ratings such as Moody’s see a “positive outlook” for the Omani economy due to “improvements in fiscal performance.”