by Philip WhitePrivate capital flow to emerging markets hit $279 billion last year. A 32% rise and the highest level since 1997 according to a report released Wednesday.If you would like to receive late breaking business news covered by AXcess News then you need to subscribe. By joining, you can stay ahead of the pack and receive the latest news in your email in-box first.
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Jan 20, 2005 (AXcess News) New York - Private capital flow to emerging markets hit $279 billion last year. A 32% rise and the highest level since 1997 according to a report released Wednesday.
The capital flow was mainly due to a weak dollar, the Institute of International Finance said.
The rise in 2004 capital flow was $53 billion higher than the Washington-based Institute’s October forecast of $226 billion.
The Institute, or IIF, is comprised of the world’s largest commercial and investment banks.Charles Dallara, IIF managing director told a news conference that the sharp decline in the dollar may have caused the sudden increase in capital flow to emerging markets.
Dallara said the IIF expected capital flow to continue at its current pace into early this year. Though it revised projections upward for the entire year to $276 million from $230, which was last projected in October.
Dallara said that Asia is expected to capture about 46% of the total net capital flows for 2005, down from 52% in 2004.AdvertisementInvestors should also look to South America where the IIF expects capital flows to exceed $39 billion in 2005, up from $26 billion in 2004. Though capital flows to the Middle East and Africa were expected to remain at 4% of the total.
The current account deficit, which is nearly 6 percent of U.S. GDP, is the broadest measure of trade since its includes investment flows.
IIF chief economist Yusuke Horiguchi, a former International Monetary Fund official, said the U.S. Federal Reserve was expected to keep raising interest rates at a measured pace through 2006 toward a neutral range of 3.5 to 4 percent.
The IIF expects the U.S. economy to grow 3.4% in 2005.It also forecast gross domestic product growth for emerging markets of 5.4 percent in 2005, one percentage point lower than in 2004.
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1 » Weak dollar made capital flow to emerging markets // Mar 17, 2008 at 12:04 am
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