EM economies are growing at their slowest pace in well over a decade (outside of the global financial crisis) and the pickup that we expect next year is mainly a reflection of fading recessions in Brazil and Russia. The scope for looser policies to boost growth is generally limited, however, especially in Latin America. That leaves currency weakness as the only adjustment mechanism in play in many cases, albeit an ineffective one where supply bottlenecks and excess leverage remain in place. Ultimately, more vigorous structural reforms will be needed. Some countries, including China, India, Indonesia, and Mexico, have embarked upon this path. Others have been slow to follow, though this will slowly change as growth remains low and the case for reform becomes more compelling. Among the more immediate risks to the outlook, we are optimistic that the re-balancing of China's economy will remain a relatively smooth and benign process, though even this has already had profound implications for EM commodity producers. The other main source of stress resides in overstretched private balance sheets in some parts of EM, which may further depress growth as these excesses are unwound. By contrast, though with some exceptions, we think sovereign balance sheets are in relatively good shape and that buffers against external shocks are adequate.