Net outflows from emerging markets (EM) weren’t just bigger than expected last year, there’s more pain to come this year, the Institute of International Finance said.
Emerging markets faced a whopping net $735 billion in capital outflows in 2015, including unrecorded flows from net errors and admissions, the IIF, a global financial industry association said Wednesday. In October, the IIF had projected $540 billion in net outflows, the first net negative figure since 1988, although that forecast didn’t include unrecorded flows.
This year isn’t likely to be much better, IIF said, forecasting total net capital outflows of $448 billion including net errors and omissions.
The finger is pointed squarely at China, although some of the outflows may have been from mainland corporates trying to be prudent.