Capital Flows to Emerging Markets

Summary

The Capital Flows to Emerging Markets are normally associated to positive consequences but unfortunately can have perverse effects when they slow down or suddenly stop. A simple model of “Pull & Push” factors can be useful to understand the driver behind the capital flows to EMs both in the past and in the future.

Key points

• Key points:
• Net Private Capital Flows to EMs will remain moderate until the world economic & trade uncertainty dissipates and global risk aversion moderates
• Net Private Capital Flows to Turkey will recover some ground after the sharp adjustment of the current account this year

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