Daily chart: The capital-freeze index | The Economist:
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Which emerging-markets are most vulnerable to a freeze in capital inflows?
THE risk of an abrupt end to capital inflows is now a worry for much of the emerging world. The Economist has combined four factors into an index measuring the vulnerability of 26 emerging markets to a capital freeze: A large current-account gap implies lots of net borrowing from abroad. A high level of short-term external debt relative to a government's stock of reserves means an economy lacks the means to tide borrowers through temporary difficulties. Rapid credit growth often signals
overstretched firms and overvalued asset prices. A more open financial system may boost growth in the long run, but it also makes it easy for capital to flood out fast.
Our interactive infographic uses a simple traffic-light system to group the countries. Green denotes economies that are at relatively little risk, countries in amber territory have potential points of fragility, and those in red are most at risk."
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