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Capital flows to emerging markets to exceed $ 1 trillion in 2021: IIF

LONDON, Apr 1 (Reuters) – Emerging markets are expected to attract $ 1.06 trillion in foreign direct investment, portfolio and bank flows this year, with China receiving the bulk, the latest estimates from the Institute of Finance showed on Thursday. International (IIF).

The agency anticipates that developing nations will receive $ 500 billion in foreign direct investment. Portfolio investments will comprise $ 374 billion and banking-related flows $ 191 billion.

China will account for just under 40% of all flows, calculated Sergi Lanau, IIF deputy chief economist.

“We believe that capital flows from emerging markets in 2021 will not be as strong as they were at the end of last year,” Lanau said in the note.

“Improving growth in emerging markets will be a pull factor that will attract flows and so will high commodity prices. However, the push factors are more mixed,” he said.

He added that strong growth in developed markets is positive although financial conditions appear less favorable.

(Reporting by Karin Strohecker; edited in Spanish by Gabriela Donoso)

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