Turkey is the only country where aggregate lending activity in emerging Europe is not below pre-crisis levels, the IIF report said, noting that credit growth was “running around 40 percent.”

Net private capital flows to 30 key emerging market economies were likely to reach $1.041 trillion this year and rise to $1.056 trillion in 2012, according to the institution.

“Capital flows to emerging economies had jumped about 55 percent in 2010, to roughly $990 billion, as the global economy pulled out of its 2009 recession,” Agence France-Presse reported, citing the report.

“Among the large emerging economies, reserve requirement ratios, or RRRs, are being relied on most heavily in China and Turkey, two of the countries most concerned about increasing capital inflows,” said the report. In Turkey, credit growth “has yet to respond significantly, however, which highlights that macro prudential measures are most successful when part of a suite of policy responses to deal with the pressures of rising inflation, rising credit growth and strong capital flows.”

Despite policies aimed at discouraging short-term inflows, Turkey will “remain the country most exposed to such inflows in the region,” the IIF said. “Turkey remains most exposed to abrupt shifts in market sentiment given its high dependence on short-term capital and volatile portfolio debt inflows.”

The institution also said countries should use methods other than capital controls to fight inflation, including allowing their currencies to rise.

Last month, Angel Gurria, the head of the Organization for Economic Cooperation and Development, which represents 34 advanced economies, said capital controls should be seen “as a last resort and only as a temporary solution."