May 29, 2007—Net private capital flows to developing countries reached a record $647 billion in 2006, although the rate of growth of these flows slowed from 34 percent in 2005 to 17 percent in 2006. Emerging Europe attracted an increasing share of the overall flows and equity financing grew much faster than debt, says Global Development Finance 2007. Despite commitments made by donors, aid flows were disappointing, and the shift from official to private sources of finance continued.
The annual World Bank report predicts that higher interest rates and emerging capacity constraints will slow the very fast growth of developing countries in the past few years, with global growth falling from 4 percent in 2006 to around 3.5 percent in 2009. This realignment could also temper some of the positive global financial conditions that have prevailed in many developing countries over the past four years. More >>