Mumbai: The Institute of International Finance (IIF), a global association of financial institutions, says overall net private capital inflows to emerging markets will rise to $1.04 trillion in 2011 from $990 billion last year.
But as the chart shows, net portfolio investments are forecast to decline from last year’s level. For the emerging Asian markets, however, both overall net private inflows as well as net portfolio investments are projected to decline from last year’s level.
Also, these forecasts, released recently on 1 June, are considerably lower than earlier projections of portfolio inflows made by the institute in January. For instance, the net portfolio inflow projection for 2011 for emerging Asia made last January was higher by $8.5 billion. The forecast for net portfolio for emerging markets as a whole was also higher by $30 billion.
Clearly, the poor performance of emerging markets this year led to a cut in the forecasts, although the institute expects flows to the Asian emerging markets to be relatively resilient.