The External Environment for Developing Countries
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The External Environment for Developing Countries June 2010 The World Bank Development Economics Prospects Group. Overview. CDS spreads have risen by 60 bp or more in 7 European countries. Source: Bloomberg, World Bank. Spreads have risen, but remain close to earlier levels.

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Overview 2808739

The External Environment for Developing CountriesJune 2010The World BankDevelopment EconomicsProspects Group


Overview

Overview


Cds spreads have risen by 60 bp or more in 7 european countries

CDS spreads have risen by 60 bp or more in 7 European countries

Source: Bloomberg, World Bank.


Spreads have risen but remain close to earlier levels

Spreads have risen, but remain close to earlier levels

EMBI spreads, index January 1, 2010=100

Source: World Bank, JP Morgan.


Euro area crisis

Euro Area Crisis


Cds spreads for selected ems spreads on credit default swaps

CDS spreads for selected EMsSpreads on credit default swaps

Source: JP Morgan and World Bank data


Spreads on highly indebted european bonds increasing again

Spreads on highly-indebted European bonds increasing again

10-year government bond spread over comparable German debt (basis points)

Sources: Bloomberg and DECPG staff calculation


Substantial uncertainty characterizes equity market developments

Substantial uncertainty characterizes equity market developments

Dow Jones, DAX and CACI [Left], VIX and VSTOXX indices [Right]

Source: Thomson/Datastream.


Oecd developments

OECD developments


Overview 2808739

Consumer confidence and retail turnoverfall in affected countries**retail sales, ch% (3mma , y/y) [left]; consumer sentiment index, dispersion [right]

Source: National Agencies. ** Greece, Portugal and Spain.


Although exports are recovering eu growth remains weak

Although exports are recovering, EU growth remains weak


Overview 2808739

German export orders, export volumesand production reviving in spring 2010 factory orders from abroad, export volumes, industrial production, ch% saar

Source: Eurostat


Overview 2808739

U.S. indicators point to favorablegrowth outturns for the second quartercapital goods orders, retail sales and export volumes, ch% (3m/3m, saar)

Source: U.S. Department of Commerce


Japanese industrial production catching up

Japanese industrial production catching up

Source: U.S. Department of Commerce


Developing country first quarter growth strong save for eca region

Developing country first quarter growth strong, save for ECA region

Source: Haver Analytics and World Bank data.


Country focus hungary

Country Focus: Hungary


Fiscal and external balances 2010 percent of gdp

Fiscal and External Balances – 2010percent of GDP

Source: European Commission, BofA/ML


Composition of debt flows hungary billions of u s dollars

Composition of debt flows – Hungary(billions of U.S. dollars)

Source: Economist Intelligence Unit


External debt in hungary percent of gdp

External debt in Hungarypercent of GDP

Source: Moody’s


Industrial production

Industrial Production


Euro area output remains robust in april on demand for intermediate goods

Euro Area output remains robust in April on demand for intermediate goods

Source: DECPG


Overview 2808739

ZEW economic sentiment deteriorated for all markets in June in the aftermath of the sovereign debt crisis

Source: ZEW Survey.


Momentum in china is easing gradually but remains robust while growth in the u s stepped up in may

Momentum in China is easing gradually, but remains robust ,while growth in the U.S. stepped up in May

Source: DECPG


International trade

International Trade


Exports from some developing regions have returned to pre crisis levels

Exports from some developing regions have returned to pre-crisis levels


Chinese capital goods exports to developing countries

Chinese capital goods exports to developing countries


Number of trade measures implemented worldwide and by the g20

Number of Trade Measures Implemented Worldwide and by the G20

Source: Global Trade Alert


Commodity prices

Commodity Prices


Crude oil prices rebound

Crude oil prices rebound

$/bbl

WTI

Brent

Dubai

Source: Datastream and DECPG.


U s oil demand surges y y 3 month moving average

U.S. oil demand surges (y/y)(3 month moving average)

kb/d

Source: U.S. EIA and DECPG.


Non opec oil production rising

Non-OPEC oil production rising

mb/d

Non-OPEC

Non-OPEC x FSU

OPEC

Source: IEA and DECPG.


Overview 2808739

Raw materials and beverage prices

remain strong in June

(2000=100)

Source: DECPG.


Metals prices stabilize

Metals prices stabilize

$/ton

‘000 tons

Aluminum price

LME stocks

Source: Datastreamand DECPG.


Overview 2808739

Global steel production

(000 tons)

Source: IISI.


International finance

International Finance


Capital flows were sluggish in may

Capital flows were sluggish in May

Source: DECPG.


European banks have big exposure to europe s troubled economies

European banks have big exposure to Europe’s troubled economies

Total claims by euro-zone banks at the end of 2009 ($ billion)

Sources: The Bank for International Settlements


Em assets rebounded from may sell off

EM assets rebounded from May sell-off

MSCI EM index in USD [L]; EMBIG bond index [R]

EM bond index [R]

EM equity index [L]

Sources: Bloomberg, JPMorgan, and DECPG staff calculation


Currencies and inflation

Currencies and inflation


Overview 2808739

Dollar gains vs euro and yen continuesbut China RMB led to short-rally in other units USD per Euro (inverse) [Left] and Yen per USD [right]

USD/Euro (inverse)

yen/USD

Source: Thomson/Datastream.


China rmb rose on an effective basis recently

China RMB rose on an effective basis recently

Currency indexes: USD per RMB; Dollar and RMB effective.

USD per RMB index

China effective

U.S. effective

Source: World Bank data.


Overview 2808739

Inflation among developing countries (save SAR)converging toward 5% paceheadline consumer price index, ch% (yr-on-yr)

Source: National Agencies.


Overview 2808739

The External Environment for Developing CountriesJune 2010The World BankDevelopment EconomicsProspects Group


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