COPENHAGEN, Denmark (Reuters): Net flows of private capital to emerging markets are projected to fall to $ 912 billion this year from an estimated $ 1.03 trillion last year, the Institute of International Finance (IIF) said on Thursday.
The institute, a global organisation of financial services firms, said it expected capital flows to emerging markets to recover to just under $ 1 trillion in 2013 on the back of a gradual improvement in the global growth outlook.
It forecast lower capital flows this year particularly into China and Central and Eastern Europe.
“The outlook for capital flows is subject to unusually large downside risks, most particularly the uncertainties in the euro area,” IIF Deputy Managing Director and Chief Economist Philip Suttle said in a statement.
“We anticipate that economic and financial tensions in the euro area will persist for some time and subside only very gradually in 2013,” Suttle said.
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Capital flows to emerging markets to fall in 2012: IIF