2012 January Capital Flows to Emerging Market Economies

January 24, 2012

Net private capital flows to our sample of 30 major emerging market economies have faltered in recent months. Net flows are now estimated to have been $910 billion in 2011, and are projected to be $746 billion in 2012. Our latest estimate for 2011 is $143 billion below the full year forecast made in September 2011. Although our dataset is annual rather than quarterly, this would be consistent with a sharp drop-off in capital flows beginning late in the third quarter of 2011 and extending through Q4. This weakness has persisted into 2012. Our lower projection for 2012 ($338 billion less than in September 2011) essentially extrapolates the weakness evident in flows in the last few months of 2011 through the first half of 2012.