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The External Environment for Developing Countries
June 2009The World Bank
Development EconomicsProspects Group
Industrial countries
Largest recipients of TARP funds
Banks that borrowed funds under TARP Amount Borrowed ($bn)
Citigroup 50
Bank of America/Merrill Lynch 45
JPMorgan Chase 25
Wells Fargo 25
Goldman Sachs 10
Morgan Stanley 10
U.S. Bancorp 6.6
Bank of New York Mellon Corp. 2.5
State Street Corp 2.5
Source: U.S. Treasury
USA
Retail sales in U.S. weaken after initial rebound
U.S. retail sales values, index, Aug. 2009=100
Motor vehicles and parts
Total retail sales
Source: Thomson/Datastream, Commerce Department.
Core inflation falling Japanese consumer prices, year-over-
year percent change
Core inflation
Headline inflation
Source: Thomson/Datastream, OECD.
ECB interest rate and Inflation Eurozone consumer prices, year-over-
year percent change
Core inflation
Headline inflation
Source: Thomson/Datastream, OECD.
ECB Interest rate
Japanese exports to China In Billion Yen
Exports to China (RHS)
Total exports, excluding China (lhs)
Source: Thomson/Datastream
3.5
4.0
4.5
5.0
5.5
Jan-00 Jul-01 Jan-03 Jul-04 Jan-06 Jul-07 Jan-09
Unemployment close to 2003 Level Percentage of labor force
Unemployment rate
Source: Thomson/Datastream
Source: Eurostat
Euro Area Q1- Sharply lower as stock building turns negative
growth of real GDP, and contributions to growth in percentage points
StocksGovernmentConsumption
InvestmentNet Exports
Leading indicators for Europe lag those for the OECD
OECD composite leading indicators
Germany
OECD
Source: Thomson/Datastream, OECD.
Retail sales in U.S. weaken after initial rebound
U.S. retail sales values, index, Aug. 2009=100
Motor vehicles and parts
Total retail sales
Source: Thomson/Datastream, Commerce Department.
60
70
80
90
100
110
120
Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09
Japanese Industrial ProductionVolume Index, 2005 = 100
Industrial Production
Source: Thomson/Datastream
European unemployment begins to pick up quickly on soft economy
number of unemploymed (millions) [L], unemployment rate (%) [R]
Source: Eurostat.
Unemployment rate [R]
# of unemployed [L]
German factory orders moving towards a bottom in February?
factory orders, domestic and export, ch% saar
Source: Bundesbank.
Total
domestic orders
export orders
Industrial production
OECD industrial production down 34% in February (saar)
industrial output, ch% (3m/3m saar)
Developing countries
High-income OECD countries
Source: Thomson/Datastream, DECPG.
Continued declines across emerging markets (EAP an exception)
industrial production ch% (3m/3m saar)
East Asia
South Asia
Europe and Central Asia
Latin America
Source: Thomson/Datastream, DECPG.
NIEs and Thailand record positve monthly IP gains
industrial production ch% (m/m seasonally adjusted)
Hong Kong (SAR, China)
Thailand
Korea
Source: Thomson/Datastream, DECPG.
International trade
Pace of decline in trade is easing on a momentum basis
goods exports, nominal, qtr/qtr ch% (saar)
Developing Countries
Source: Thomson/Datastream
Oil prices
Crude oil prices rise on OPEC production cuts
$/bbl mb/d
Oil price [L scale]
OPEC Production [R]
Source: IEA and DECPG Commodities Group.
World Oil Consumption Growth (mb/d y/y)
Source: IEA and DECPG Commodities Group.
OECDNon-OECD
U.S. crude oil stocks rise on weak demandM bbl
5-year high-low ranges
Source: U.S. Dept Energy and DECPG Commodities Group.
Non-oil commodity prices
Food prices decline in March on weak demand (2000=100)
Source: DECPG Commodities Group.
Copper prices rebound on falling stocks
$/ton ‘000 tons
Copper price
LME stocks
Source: LME and DECPG Commodities Group.
Consumption Growth (% y/y)
Aluminum Copper Crude Oil
World China World China World China
2002-06average
7.5 19.9 3.0 9.6 2.0 9.1
2007 10.4 42.8 6.6 34.6 1.2 4.6
1H08 5.6 15.9 0.1 7.4 0.9 5.0
2H08 -6.0 -4.7 -3.5 1.8 -1.5 3.6
1Q09 -20.3 -10.4 -17.6 0.4 -3.7 -3.5
Source: DECPG Commodities Group.
International Finance
Capital flows down by two-thirds from first-quarter 2008 levels
Source: DECPG Finance Team.
Gross capital flows to emerging markets
$ billion
Q1 Total Q1 Total Jan Feb Mar Q1
Total 156 652 103 389 23 8 9 40
Bonds 58 146 12 65 9 7 2 18
Banks 72 312 71 257 8 1 5 13
Equity 26 194 20 68 6 1 2 8
Lat. America 42 156 19 90 9 3 4 17
Bonds 20 45 5 20 5 3 2 10
E. Europe 79 247 36 157 5 1 0 5
Bonds 27 64 2 35 2 1 0 3
Asia 24 188 38 98 8 4 2 14
Bonds 8 23 3 7 2 3 0 5
Others 11 61 11 44 0 1 2 3
2007 2008 2009
Strong returns to EM equities in 2009
Source: Morgan-Stanley through Thomson/Datastream
*as of April 17th
Total returns yr to date in local currency, %MSCI Developed
MSCI EM
MSCI BRICEM BIG Developed HY bond
Volume of EM IPOs has come to a standstill since September 2008
capital raised ($bn) [L], number of deals [R]
Source: Dealogic
# of deals [R]
Capital raised [L]
Currencies
Focus
The External Environment for Developing Countries
April 2009The World Bank
Development EconomicsProspects Group