EM Policy Credibility — Weekly Briefing (2026-08-03)

Turkey emerged as the week's most dramatic mover, surging 27.5 points to 50.3 as its Credibility Gap component expanded by 39.9 points, signaling a sharp restoration of policy credibility after sustained weakness. Bolivia similarly gained ground with a 22.0-point advance to 39.6, driven by a 31.4-point improvement in its Credibility Gap, suggesting renewed alignment between announced and implemented policy frameworks. Both shifts represent material reversals in emerging-market policy confidence.

On the downside, Israel fell 22.2 points to 40.9, with the decline anchored in a Growth component loss of 8.1 points, while Cambodia slipped 10.8 points to 58.4 amid a 23.2-point Credibility Gap contraction. Sierra Leone and Romania both suffered sharper credibility deterioration, dropping 19.0 and 12.8 points respectively, each driven by Credibility Gap compressions exceeding 37 points—suggesting material divergences between policy commitments and execution in both jurisdictions.

Data quality was compromised this week across multiple sources including EMBER, EPU, FAO, and several CPI indices from FRED, IMF, and OECD, as well as World Bank nightlights data, limiting the completeness of the underlying assessment. Readers should factor this source degradation into positioning decisions on the economies tracked.

Movers

Data caveat: the following sources are currently degraded and may lag: EMBER, EPU, FAO, FRED_CPI, IMF_CTOT, IMF_IFS_CPI, OECD_CPI, WB_NIGHTLIGHTS.