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The External Environment for Developing Countries April 2010 The World Bank Development Economics Prospects Group

The External Environment for Developing Countries April 2010 The World Bank Development Economics Prospects Group. Equity and commodity markets echo the pickup in global economic activity Dow-Jones Industrial average [left]; Copper price ($/ton) [right]. Copper price [right]. Dow Jones [left].

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The External Environment for Developing Countries April 2010 The World Bank Development Economics Prospects Group

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  1. The External Environment for Developing CountriesApril 2010The World BankDevelopment EconomicsProspects Group

  2. Equity and commodity markets echo the pickup in global economic activityDow-Jones Industrial average [left]; Copper price ($/ton) [right] Copper price [right] Dow Jones [left] Source: Thomson-Datastream

  3. Greek CDS spread drops sharply in the wake of Euro-Group/IMF financial package Source: Bloomberg.

  4. OECD developments

  5. ISM surveys show step-up in U.S. services headline activity indexes, mfgr and services Source: Institute for Supply Management (ISM).

  6. U.S. business investment and employment turn the corner to growthbus. investment, ch% (q/q) saar [left]; change in employment ‘000 [right] Source: U.S. Departments of Commerce and Labor.

  7. U.S. housing hit by a wave of foreclosures Home sales, ch% 3mma y/y Source: U.S. Department of Commerce and National Association of Realtors.

  8. Japanese prices still falling despite pickup in economic activityconsumer and producer prices, GDP deflator and Industrial Production ch% (y/y) Source: Japan Cabinet Office, METI.

  9. Greek CDS spread drops sharply in the wake of Euro-Group/IMF financial package Source: Bloomberg.

  10. European sentiment steps up…with littleevidence for growth IFO (overall), Bank du France (business climate) [left]; German export volumes ,ch% saar [right] Source: IFO, Bank du France and Bundesbank.

  11. Country Focus:China

  12. China’s growth remains robust in 2010 Real growth (percent) Source: World Bank

  13. Net external trade subtracted heavily from growth in 2009 Contribution to growth (real, percent y-o-y) Source: World Bank

  14. China’s exports have recovered impressively Index, constant prices (October 2008 = 100) Source: World Bank

  15. The composition of growth is likely to change substantially this year Contribution to growth (real, percent y-o-y) Source: World Bank

  16. The external surplus is likely past its peak Share of GDP (percent) Source: World Bank

  17. China’s cyclical condition differs sharply from that in the United States Percent Source: World Bank

  18. Industrial production

  19. Global industrial production continues to expand at a rate near 10% global industrial production, ch% (3m/3m, saar) Source: World Bank calculations based on Thomson Datastream data

  20. Pace of recovey in production mixed across developing regions industrial production, ch% (3m/3m saar) Source: World Bank data

  21. Growth in retail sales picking up but volumes yet to breach pre-crisis levels global retail sales proxy, (excl United States), ch% (y/y) Source: DEC Prospects Group calculations

  22. International trade

  23. Developing country trade increased above pre-crisis peaks as of early 2010 export and import volumes, billions USD Source: World Bank, DEC Prospects Group

  24. China’s share in U.S. trade deficit in part a reflection of East Asia’s production chain share of selected countries in U.S. trade deficit Source: U.S. ITC data and World Bank calculations

  25. LPI 2010 – performance varies around the world Logistics unfriendly Partial performers Consistent performers Logistics friendly No data Source: Connecting to Compete, World Bank, 2010

  26. Oil prices

  27. Oil prices and OPEC production million b/d $/bbl OPEC production [R scale] Oil price [L scale] Source: IEA, Bloomberg and DECPG.

  28. U.S. petroleum inventories remain relatively high million barrels 5-year range U.S. petroleum inventories Source: U.S. EIA.

  29. U.S. natural gas prices remain low on unconventional production gains $/mmbtu Oil price U.S. gas price Source: IEA, Bloomberg and DECPG.

  30. Non-oil commodity prices

  31. Food-beverage prices fall but cotton & rubber prices up on supply constraints (2000=100) Source: DECPG.

  32. Metals prices rise on demand expectations $/ton $/ton Copper [L scale] Aluminum [L scale] Nickel [R scale] Source: IEA, Bloomberg and DECPG.

  33. Global steel production (000 tons) Source: IISI.

  34. International Finance

  35. Capital flows to EM surged in March Source: DECPG.

  36. Volatility of risky assets continues to ease in 2010VIX index [left], daily change in weighted EMBIG spreads (30-day movavg)[right] Equity volatility, VIX index [L] EM bond volatility, EMBIG [R] Source: JPMorgan, Bloomberg, World Bank.

  37. U.S. Treasury yields increasing…European and EM bonds remain subdued 10-year government bonds yields (%) Source: Bloomberg and World Bank.

  38. Currencies and inflation

  39. Euro regains some ground vs dollar on partial relaxation of Greek debt tensions USD per Euro (inverse) [Left] and Yen per USD [right] yen/USD USD/Euro (inverse) Source: Thomson/Datastream.

  40. Volatility in USD-Libor increases sharply with UST yields moving well above BundUSD-Libor, EURIBOR, US Treasuty 10-year yield and 10-yr Bund yield, percent UST-10-yr Bund10-yr EURIBOR USD-LIBOR Source: Thomson-Datastream

  41. Inflation picking up as the period of highcommodity prices passes from calculation headline CPI indexes, ch% yr/yr Source: World Bank, DEC Prospects Group

  42. FocusFinancing gaps in 2010

  43. External financing needs decline in 2010-11 % of GDP of those countries with financing needs [right] $ trillion Maturing foreign debt [left] Current account deficit [left] Source: DataStream and World Bank, DEC Prospects Group

  44. Modest recovery in private capital expected in 2010 and 2011 Net private capital flows to developing countries, $ billion Source: DataStream and World Bank, DEC Prospects Group

  45. External financing gaps are projected to fall 200920102011 Total gap ($bn): 352 210 180 Source: World Bank DEC Prospects Group staff estimates

  46. Financing gaps were closed through current account adjustment and higher-than expected capital flows billions dollars Source: World Bank, DEC Prospects Group

  47. Net official flows increased sharply in response to the crisis billions dollars

  48. Sovereign debt issuance by high-income countries, 2006-2010 trillions dollars Source: IMF and World Bank

  49. The External Environment for Developing CountriesApril 2010The World BankDevelopment EconomicsProspects Group

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