Capital inflows to EM to increase in 2017, Egypt to get USD 32 bn -IIF

Capital inflows to EM to increase in 2017, Egypt to get USD 32 bn -IIF. Non-resident capital inflows to emerging markets are projected to increase by USD 252 bn to USD 970 bn in 2017, according to a report by the Institute of International Finance (IIF). The IIF expects resident capital flows to EMs to fall this year because of China’s capital controls that clamped down on outward investment. Most EMs should see flows improving, but the IIF remains cautious on Brazil. The report notes that the EGP flotation, and tight monetary and fiscal policies, were “were critical steps to restore competitiveness and macroeconomic stability, rebuild reserves, and alleviate investor uncertainty over [EGP] valuation.” It expects capital flows to Egypt to increase and peak at USD 32 bn in 2017 “on the back of higher FDI, disbursement of loans from multilateral organizations, and issuance of Eurobonds.” It also forecasts that portfolio investment in Egypt will shift to a net inflow of USD 7 bn in the current fiscal year, from a net outflow of USD 1.3 bn in FY 2015-16.