Emerging markets and developing economies are defying the overall global economic slowdown and are expected to grow by 3.9 percent in 2023 and 3.8 in 2024, relatively stable growth compared to 3.8 percent growth recorded in 2022. Incoming GDP reports and near-term activity data suggest economic activity in emerging markets is holding up well in the first half of 2023. We expect some slowing in momentum in the second half of 2023, but only moderately. Headline inflation continued to come down through May. Fading base effects and falling factory-gate prices point to further disinflationary pressures. On the other hand, core inflation remains elevated and may take longer to come slow decisively, particularly as service-sector activity remains strong.