Crude exporters will post their first deficit in current accounts, the broadest measure of trade in goods and services, this year since 1998, forcing them to retreat from global capital markets, Lubin said, citing forecasts by the International Monetary Fund. Crude oil prices have dropped 34 percent over the past year and have reached the lowest since 2003.
Sovereign wealth funds in oil-producing nations, which amassed $4 trillion in assets as one of the major forces in global financing, cut their investments in developing nations by $50 billion last year to $550 billion, said Lubin, citing estimates from the Institute of International Finance.
Oil Prices
Growth in emerging markets is already under pressure. Excluding China, developing countries grew slower than advanced economies last year for the first time since 2003, according to Citigroup. Falling oil prices only add to the dismal outlook because “oil importers do not gain to the same extent as oil exporters lose,” said Lubin.