Press Release
July 8, 2015

Emerging market GDP growth picked up in Q2 after its multi-year lows in the previous two quarters, according to the latest update of the IIF’s EM Coincident Indicator.  The EMCI rose to 2.7 percent in June, up by 0.5pp relative to May and 0.7pp relative to March. This increased momentum is broad-based across regions, but most notably in EMEA and LATAM. 

“It is particularly encouraging that EM trade data continued to show signs of a turnaround this quarter, following a prolonged period of weakness since last autumn,” said Kristina Morkunaite, lead author of the report. “This turnaround suggests that stronger growth in advanced economies is now exerting more pull, raising hopes that EM weakness has run its course and activity will continue to gain momentum in 2015H2.

Press Release
June 25, 2015

Portfolio flows to emerging markets fell in June, reaching a year to date low of $4.2 billion, according to the latest EM Portfolio Flows Tracker by the Institute of International Finance.

“Portfolio flows to emerging markets have weakened further,” said Charles Collyns, chief economist at the IIF. “Emerging market investors seem to have become increasingly cautious as the Fed’s first interest rate hike since 2006 is approaching. Fears of Greece leaving the Euro Area have not helped either.”

The IIF reported that emerging market debt flows continued a five month streak of subdued momentum, while equity markets experienced the weakest monthly inflow of 2015. On a regional basis, inflows to EM Asia slowed in June while flows to Latin America were more resilient. In Emerging Europe, outflows continued for the fifth consecutive month.

Press Release
June 23, 2015

MEETING OF THE PARIS CLUB WITH REPRESENTATIVES OF NON PARIS CLUB BILATERAL CREDITORS AND REPRESENTATIVES OF THE PRIVATE SECTOR

For the 15th consecutive year, the Paris Club and the Institute of International Finance jointly organized a meeting between Paris Club creditors, Paris Club ad hoc participants and private creditors, and representatives from the International Monetary Fund and the World Bank.

Press Release
June 16, 2015

The Institute of International Finance today announced that Clay Berry will join as Chief Economist for Europe effective August 17.

Berry currently serves as the U.S. Department of the Treasury’s Financial Attaché in Moscow. Berry represents the Treasury Department in Russia and the Commonwealth of Independent States (CIS), advancing the Treasury’s interests in the region.

“Developments in Europe, especially Emerging Europe, will be a dominant theme in the global economy for the foreseeable future,” said Tim Adams, president and CEO of the IIF. “Clay’s experience and contacts throughout the region will be a vital asset to the IIF and its members.”

Press Release
June 10, 2015

Emerging market GDP growth likely accelerated in 2015Q2 after having fallen to a six-year low in Q1 according to the latest update of the IIF's EM Coincident Indicator. The EMCI showed an increase to 2.2 percent in May, up from 1.6 percent in April.

“We’ve begun to see a more positive trend in emerging market growth since the steep decline observed since last autumn,” said Kristina Morkunaite, lead author of the report. “This underpins hope that EM growth will pick up in Q2, having reached a six-year low in the first quarter of 2015.”

Press Release
June 9, 2015

The Institute of International Finance today announced the opening of a new European Representative Office in London.

“Europe continues to play a large role in the global financial system and within our membership,” said Tim Adams, president and CEO of the IIF. “Opening this office will allow us to better serve our members in the region and more closely engage with key global regulatory bodies.”

Press Release
June 3, 2015

The European Central Bank Governing Council reviewed a brightening landscape at today’s monetary policy meeting as financial conditions remain favorable, real economy indicators are solid and inflation has picked up, according to the IIF’s updated “Draghi’s Dashboard”.

“Our inflation sub-index is finally climbing out of ‘red’ territory, as headline inflation seems to have bottomed out and is now on the right track – a signal that was reinforced by Tuesday’s report of an acceleration in Euro Area core inflation in May,” said Sonja Gibbs, Director of Capital Markets at the IIF. “The rise in our sub-index also reflects a welcome increase in long-term inflation expectations.”

Press Release
June 2, 2015

Against a backdrop of bank deleveraging, years of ultra-low rates, and government efforts to develop corporate bond markets, there has been a notable shift in the funding mix of the global corporate sector towards bond financing, according to the latest Capital Markets Monitor from the Institute of International Finance.

“One of the key vulnerabilities exacerbating the financial crisis was high levels of leverage in many banking systems,” said Hung Tran, executive managing director at the IIF. “Consequently, an important component of global financial regulatory reform has been to reduce leverage in banks, through measures such as capital requirements and leverage ratios. However, there has been growing concern over the past few years that leverage has been migrating from banks to non-banks including the corporate and household sectors, both in mature and emerging economies.”

Press Release
May 28, 2015

Capital flows to emerging markets are projected to slow to $981 billion in 2015, their lowest level since 2009, according to the IIF’s May report on Capital Flows to Emerging Markets.

“Weak EM growth performance is taking a heavy toll on capital inflows to EMs, which we now estimate at only $150 billion in Q1 2015, the lowest rate in six years”, said Charles Collyns, chief economist at the IIF. “We do project a moderate pickup of flows later in 2015 and 2016, but this depends on some strengthening of growth and no surprises from the Fed. Continued economic weakness or a bumpy Fed ride could lead to further stagnation of EM capital inflows.”

 “A deterioration of secondary market liquidity and increased corporate indebtedness across emerging markets could exacerbate the fallout from a potential EM stress event,” said Hung Tran, executive managing director at the IIF. “In an environment of rising global interest rates, Fed tightening, EM currency depreciation, and slowing economic growth and capital flows, USD-denominated debt may become more difficult for many EM non-financial corporate companies to service and refinance their debt.”

Press Release
May 19, 2015

Emerging market portfolio flows have suffered a significant retrenchment since early May, according to the first issue of the IIF Flows Alert.

“EM outflows seem to have been triggered by the fallout from the global bond tantrum,” said Charles Collyns, chief economist at the IIF. “Even though the impact on EM spreads has been fairly limited so far, our data shows that the jump in global market interest rates has spilled over into portfolio outflows from emerging markets.”

IIF Flows Alerts are an early warning system that is based on daily portfolio flows to 7 EMs, including India, Indonesia, Korea, Thailand, South Africa, Brazil, and Hungary. Collectively, these countries suffered outflows of $3.2 billion in the first half of May. The reversal was broad-based, affecting all countries except Brazil.

Media Contacts

Andrew DeSouza
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E-mail: adesouza@iif.com

Emily Klopf
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E-mail: eklopf@iif.com