Many emerging market countries have implemented different monetary policies (when compared to DM). Given this, many have had great success in restraining inflation.
A key factor for the EM debt market is the degree and scale of global capital flows and whether the asset class can attract yield-starved investors. This in turn depends on investor and consumer sentiment in developed markets. As supply-side constraints are supportive for EM-markets, EM debt appears to be the sweet spot for the time being.
Also, most EM currencies remain undervalued versus the USD which could be off-set by high levels of inflation, twin deficits, and rising commodity prices. While the overall EM debt market is expected to remain volatile, strong fundamentals remain in place for Southeast Asian debt and USD-denominated corporate bonds.