.
Overview
Financial Flows to Developing Countries: Trend in 2009
I
nternational capital flows to the 128 developing countries reporting to the World Bank Debtor Reporting System (DRS) fell by 20 percent in 2009 to $598 billion (3.7 percent of gross national income [GNI]), compared with $744 billion in 2008 (4.5 percent of GNI) and a little over half the peak level of $1,111 billion realized in 2007 (table 1). Private flows (debt and equity) declined by 27 percent despite a rebound in bond issuance, portfolio equity flows, and short-term debt flows
(which were mostly trade related). Both foreign direct investment (FDI) flows and bank lending fell precipitously. By contrast, the net inflow of debt-related financing from official creditors (excluding grants) rose 175 percent as support was stepped up to low- and middle-income countries severely affected by the global financial crisis. Net equity inflows (direct investment and portfolio investment combined) totaled $462 billion in 2009, down 13 percent from the $534 billion total recorded in 2008 and close to 30 percent lower than the $643 billion total recorded in 2007
Table 1. Net Capital Inflows to Developing Countries, 2001–09 $ billions Inflows
Net private and official inflows
2001
2002
2003
2004
2005
2006
2007
2008
2009
597.8
212.6
154.4
262.4
342.2
464.8
610.2
1,110.5
743.9
Percentage of GNI
3.7
2.7
3.9
4.3
4.9
5.5
8.0
4.5
3.7
Net equity inflows
165.5
162.5
178.8
243.6
341.1
451.0
643.2
533.9
462.2
Net FDI inflows
158.8
154.3
152.5
206.7
273.6
343.3
508.1
587.1
354.1
6.7
8.3
26.3
36.9
67.5
107.7
135.1
�53.2
108.2
47.2
�8.1
83.6
98.6
123.7
159.2
467.3
209.9
135.5
Official creditors
31.0
6.7
�11.9
�24.1
�64.0
�69.6
0.0
27.8
76.4
World Bank
7.4
�0.5
�2.5
2.4
2.7
�0.2
5.2
7.3
17.7 26.5
Net portfolio equity inflows Net debt flows
IMF
19.5
14.2
2.4
�14.7
�40.2
�26.7
�5.1
10.0
4.1
�7.0
�11.8
�11.8
�26.6
�42.6
0.0
10.6
32.2
Private creditors
16.2
�14.8
95.5
122.7
187.7
228.8
467.3
182.1
59.1
Net medium- and long-term debt flows
�3.2
�1.7
38.3
69.8
113.2
144.9
283.1
196.1
52.7
15.5
11.1
23.1
34.3
48.2
31.7
88.2
24.1
51.1
Banks and other private creditors
�18.7
�12.8
15.2
35.5
65.0
113.2
194.9
172.0
1.6
Net short-term debt flows
19.4
�13.1
57.2
52.9
74.5
83.9
184.2
�14.0
6.4
�81.5
�165.3
�288.1
�395.3
�404.6
�634.2
�1,083.7
�452.7
�673.8
Other official creditors
Bonds
Change in reserves (� � increase) Memorandum items Official grants excluding technical cooperation
28.4
33.1
44.7
52.1
56.9
106.9
76.1
86.4
95.0
Worker remittances
93.8
109.9
136.8
158.6
190.6
225.3
277.2
323.5
305.2
Sources: World Bank Debtor Reporting System, IMF, Bank for International Settlements, and OECD. Note: Grants are World Bank staff estimates.
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