Emerging markets are proving far more resilient to global financial shocks than a decade ago, thanks to better policy frameworks rather than luck, according to new research by the International Monetary Fund (IMF).

The study covered 26 major emerging economies and found that post-2008 crisis downturns have become shallower and less inflationary. Six months after a typical “risk-off” shock, GDP now falls about one percent on average, compared with 1.8% before the global financial crisis, while inflation surges that once reached 0.9% have largely vanished.

The IMF attributes this shift to stronger monetary, fiscal, and macroprudential regimes. Central banks have also become more independent and credible, focusing on output stability as inflation expectations anchor. Fiscal authorities, meanwhile, have adopted clearer debt rules and more robust responses, reducing vulnerability to capital flight.

The report found that strong institutional frameworks clearly helped mitigate economic shocks. Economies with sensible policies experienced output drops of only 0.1% and a modest 0.2-point rise in prices after a 10% currency depreciation, compared with 0.3% and 1.0-point jumps respectively in weaker peers. The probability of a sudden stop in capital flows has also declined.