Emerging Markets Show Resilience with $110 Billion Capital Inflows: IMF Report

The International Monetary Fund reported that gross capital inflows into emerging markets, excluding China, rose to $110 billion in the last year, the highest since 2018. Despite higher U.S. interest rates, these markets showed resilience. The report also noted that China experienced net capital outflows from 2022-2023.

Emerging markets displayed remarkable resilience with gross capital inflows reaching $110 billion last year, the highest since 2018, according to a Friday report by the International Monetary Fund (IMF). This indicates strong performance despite sharply increased U.S. interest rates diverting funds to dollar assets.

The IMF's External Sector Report highlighted that while these emerging markets saw a drop in volatile net portfolio inflows, the net inflows of foreign direct investment (FDI) remained stable. This stability underscores their ability to weather financial imbalances effectively.

Contrastingly, China witnessed net capital outflows during the 2022-2023 period, including negative net FDI inflows, revealing different trends across major global economies.