Investment in developing world to rise -World Bank

Thu Dec 8, 2011 6:56pm EST
 
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By Lesley Wroughton

WASHINGTON (Reuters) - Investors are cautiously optimistic about their investment plans in developing countries over the next 12 months despite increased concerns about the euro zone debt crisis, a survey by the World Bank's political risk insurance agency found on Thursday.

In a survey of 275 global investors by the Multilateral Investment Guarantee Agency (MIGA), more than half of corporate investors said they expect to increase investments in developing countries over the next 12 months.

Nearly three quarters of respondents said they planned to moderately or substantially increase investments in developing countries over the next three years.

Just 10 percent of respondents said they planned to decrease investments, and just 8 percent planned to cut back on investments over the medium term.

MIGA chief economist Ravi Vish told Reuters that even though the survey was conducted six months ago and may not capture the growing concern over the euro zone crisis, investors remain upbeat about developing countries' prospects.

Vish said investors were concerned about spillover effects from the euro zone crisis and a possible liquidity freeze by banks, which would impact project financing.

European banks have been the largest investors in emerging market project finance, Vish added.

He said investors in developing economies were mainly drawn by oil, gas and mining sectors, with growing interest in banking and infrastructure development.   Continued...