Capital inflows likely to turn positive in Q4: CMIE

Mumbai: Capital flows into the country are likely to turn positive in the March quarter of FY 09, an economic think-tank forecast in its report.

"We expect the capital account of the balance of payments (BoP) of the country to experience a net flow of USD 3,740 million in the March 2009 quarter as against an outflow of USD 3,683 million in the December 2008 quarter," Centre for

Monitoring Indian Economy (CMIE) said in its monthly report on the state of the Indian economy.

Along with a higher net flow, the report also projected that the foreign direct investment into the country would continue to surge, with Q4 of the last fiscal expected to record an inflow of USD 3,900 million on this account.

According to the report, the official BoP data for the December quarter of the last fiscal showed an outflow of USD 3.7-billion.

It is for the first time in a decade that the capital account of the country's BoPs showed an outflow on net basis, it said.

"However, we believe that this phenomenon will not repeat itself in the March 2009 quarter," CMIE said in its report.