Emerging markets (EM) have suffered bigger net capital outflows over the latest three quarters than during the 2008-09 financial crisis, indicating fragile confidence in some of the largest developing economies.
Total net outflows from the 15 largest emerging markets rose to $600.1bn over three quarters to the end of March, higher than the $545.2bn in outflows seen during the crisis-ridden three quarters to the end of March 2009, according to estimates by NN Investment Partners (formerly ING Investment Management) based partly on recently-released official data.
In spite of the magnitude of the outflows ($600bn, for reference, equates to slightly more than the GDP of Nigeria last year), the exodus of funds represents only a partial reversal of the tide of liquidity that gushed into EM during the years of US monetary loosening after the financial crisis. From July 2009 until the end of June last year, a net total of $2.2tn in capital flooded into the 15 EMs.