Net private capital flows to 29 major emerging-market countries will fall below $160 billion in 1998, from $240 billion last year, according to the Institute of International Finance.

Reflecting concern among banks about prospects for emerging-market economies, the Washington-based trade organization predicted that commercial bank lending to those countries tries will fall to $42 billion, from $97 billion in 1997 and $180 billion in 1996.

"Net lending by commercial banks is projected at about zero this year as net repayments by Asian economies offset positive lending to emerging- market economies elsewhere," the institute noted. Among its findings:

Spreads on emerging-market bonds have widened significantly since Russia devalued the ruble and declared a moratorium on payments to foreign banks in August.

New bond issues from emerging markets fell to $63 billion this year through September, from $93 billion in the same period last year, and have virtually ground to a halt.

Direct equity investments in emerging markets have been less affected by the crisis and are expected to reach $106 billion. However, portfolio investments will fall to around $11 billion, from $26 billion last year.

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