the external environment for developing countries june 2009 the world bank development economics...
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The External Environment for Developing Countries
June 2009The World Bank
Development EconomicsProspects Group
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Industrial countries
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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
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USA
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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.
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Core inflation falling Japanese consumer prices, year-over-
year percent change
Core inflation
Headline inflation
Source: Thomson/Datastream, OECD.
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ECB interest rate and Inflation Eurozone consumer prices, year-over-
year percent change
Core inflation
Headline inflation
Source: Thomson/Datastream, OECD.
ECB Interest rate
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Japanese exports to China In Billion Yen
Exports to China (RHS)
Total exports, excluding China (lhs)
Source: Thomson/Datastream
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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
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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
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Leading indicators for Europe lag those for the OECD
OECD composite leading indicators
Germany
OECD
Source: Thomson/Datastream, OECD.
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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.
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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
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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]
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German factory orders moving towards a bottom in February?
factory orders, domestic and export, ch% saar
Source: Bundesbank.
Total
domestic orders
export orders
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Industrial production
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OECD industrial production down 34% in February (saar)
industrial output, ch% (3m/3m saar)
Developing countries
High-income OECD countries
Source: Thomson/Datastream, DECPG.
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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.
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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.
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International trade
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Pace of decline in trade is easing on a momentum basis
goods exports, nominal, qtr/qtr ch% (saar)
Developing Countries
Source: Thomson/Datastream
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Oil prices
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Crude oil prices rise on OPEC production cuts
$/bbl mb/d
Oil price [L scale]
OPEC Production [R]
Source: IEA and DECPG Commodities Group.
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World Oil Consumption Growth (mb/d y/y)
Source: IEA and DECPG Commodities Group.
OECDNon-OECD
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U.S. crude oil stocks rise on weak demandM bbl
5-year high-low ranges
Source: U.S. Dept Energy and DECPG Commodities Group.
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Non-oil commodity prices
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Food prices decline in March on weak demand (2000=100)
Source: DECPG Commodities Group.
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Copper prices rebound on falling stocks
$/ton ‘000 tons
Copper price
LME stocks
Source: LME and DECPG Commodities Group.
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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.
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International Finance
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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
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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
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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]
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Currencies
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Focus
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The External Environment for Developing Countries
April 2009The World Bank
Development EconomicsProspects Group