The World Economic Outlook of the International Monetary Fund (IMF) has a database that contains, among plenty of other things, the numbers for net private portfolio flows.
The October 2009 database forecasts that net private portfolio outflows from emerging and developing economies would increase from $85.361 billion (Rs4 trillion) to $99.835 billion in 2009 and further to $110.436 billion in 2010.
For developing Asia, which, according to IMF numbers, saw net private portfolio inflows of $7.9 billion in 2008, the forecast is for net outflows of $85.184 billion for 2009, which goes up even further to $127.542 billion in 2010.
How the IMF arrived at these numbers is a mystery, because, at least so far this year, portfolio inflows to emerging markets and especially to emerging Asia have been very robust.
If the IMF is right, we’re likely to see the mother of all meltdowns in emerging markets, a crash that would make the 2008 one look like a small correction.
Why the IMF should see such an apocalypse when it projects a gradual improvement for the global economy is inexplicable.
Also See Which Numbers Are Right? (Graphics)
Did the IMF economists forget to update their estimates? Not really. In the database appended with their April 2009 World Economic Outlook, the forecast of net private portfolio outflows for emerging and developing economies for 2009 was $234.509 billion, far more than the current estimate.
But what’s even more intriguing is that not a single number in the series for net private flows to developing and emerging countries in the April 2009 database agrees with the numbers in the October 2009 database or indeed with the October 2008 database.
For example, the number for 2003 is an outflow of $3.828 billion, according to the April 2009 database, while it was an inflow of $1.804 billion according to the October 2009 database.
Even more strangely, that number for 2003 is an outflow of $12.995 billion in the October 2008 database.
The figures for the other years too don’t agree. Why, even the number for 1984 is $4.058 billion in the April 2009 database and $1.125 billion in the October 2009 database. Surely, they aren’t revising the 1984 numbers in 2009?
Picking the year 2004 at random, we find that net private flows to developing Asia were $13.369 billion in the October 2008 database, $10.165 billion in the April 2009 database and $38.884 billion in the October 2009 database. There are similar differences in the figures for net direct investment.
To cut a long story short, these discrepancies cast a long shadow of doubt upon the IMF numbers. And if these figures are wrong, where’s the guarantee that the rest of the numbers in the database are any better?
Graphics by Sandeep Bhatnagar / Mint