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