Capital flows
Net capital flows to the EBRD region have been volatile, reflecting both the general volatility of capital flows to emerging markets and regional factors such as the crisis in Ukraine. Net capital inflows declined in the third quarter of 2013, following increased expectations that quantitative easing would be tapered. Turkey – where non-FDI capital inflows finance a major part of the persistently large current account deficit – was one of the emerging markets that was most significantly affected by that fall in capital inflows. The impact of that tapering moderated in subsequent quarters, but in early 2014 the outflows increased again, particularly for Russia and the EEC region, as tensions in Ukraine escalated (see Chart M.10). In the first half of 2014, syndicated lending to the region declined by 58 per cent year on year in volume terms, driven by declines in Russia and Turkey, while globally the volume of syndicated lending increased by 7 per cent over the same period.
CHART M.10
Source: National authorities via CEIC Data, and authors’ calculations.
Note: Data are derived from the capital and financial accounts of individual countries in the EBRD region. Private non-FDI flows are the sum of the capital account, portfolio investment, other investment, and net errors and omissions. In some countries net errors and omissions are a significant channel for the financing of current account deficits or a major channel for capital flight, hence their inclusion.
| All countries in the EBRD region | CEB and SEE | Turkey | Russia | SEMED |
- FDI inflows
- Non-FDI inflows
- FDI outflows
- Total flows
Note: Data are derived from the capital and financial accounts of individual countries in the EBRD region. Private non-FDI flows are the sum of the capital account, portfolio investment, other investment, and net errors and omissions. In some countries net errors and omissions are a significant channel for the financing of current account deficits or a major channel for capital flight, hence their inclusion.