国际英语新闻：Emerging markets GDP to increase by 6.3 pct in 2011: IIF chief economist

WASHINGTON, Jan. 24 (Xinhua) -- The economic outlook for emerging markets was favorable and emerging markets' gross domestic product (GDP) was forecast to grow at a pace of 6.3 percent in 2011 and 6.2 percent in 2012, Philip Suttle, chief economist of the Institute of International Finance (IIF), said on Monday.

Private capital flows to emerging economies surged in the last two years, encouraged by factors including positive growth and a widening yield differential favoring emerging markets, the IIF said in a report.

Net private capital flows to emerging economies rose from around 600 billion U.S. dollars in 2009 to around 910 billion dollars in 2010. The total amount was expected to reach nearly 1 trillion dollars this year and surpass 1 trillion dollars in 2012, noted the report.

Strong output growth compared with mature economies, together with improving perceptions of relative risk, provided ample investment opportunities in emerging markets, Suttle added.

"The main factor driving emerging markets' economic expansion was the strength in domestic demand. There is a combination of strong consumption and robust investment," he told Xinhua on Monday.

"We are seeing a very strong investment in China, and we are also seeing strong investments across other emerging markets," added Suttle, also deputy managing director of the Washington- based agency.

Although global economic recovery had gained momentum in recent months, conditions still remained fragile, stressed Charles Dallara, managing director of the IIF, adding that there remained the need for more effective policy coordination led by the Group of 20 major economies on issues including exchange rates, high budget deficits and debt in many mature economies and mounting inflationary pressure in some emerging markets.

"An array of factors contributed to the inflationary pressure in the emerging markets, including strong economic growth, small spare capacity, relatively easy monetary policies as well as high commodity price pressure," Suttle observed.

Private capital flows to Emerging Asia were likely to remain close to record highs supported by strong growth and huge global liquidity, with Emerging Asia accounting for more than 40 percent of net private capital flows to emerging markets this year, led by China and India, according to the report.

Strong capital inflows raised important policy issues, as most emerging economies needed tighter monetary policy but would also benefit from tighter fiscal and macro-prudential policies.

The Washington-based IIF represents more than 420 world leading financial institutions headquartered in more than 70 countries.