Emerging Markets Should Brace for More Outflows: IIF

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.

CNBC

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.