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Capital Flows to Central and Eastern Europe

Philip R. Lane and Gian Maria Milesi-Ferretti

We examine the evolution of the external position in CEE countries over the past decade, with a strong emphasis on the composition of the international balance sheet. We assess the extent of their international financial integration, in comparison to the advanced economies and other emerging markets, and highlight the most salient features of their external capital
structure in terms of the relative importance of FDI, portfolio equity, and external debt. In addition, we briefly describe the bilateral and currency composition of their external liabilities. Finally, we explore the implications of the accumulated stock of external liabilities for future trade and current account balances. JEL Classification Numbers: F32; F34

Last updated 28 August 2014 by IIIS (Email).