Transcript June 2009

The External Environment for
Developing Countries
June 2009
The World Bank
Development Economics
Prospects Group
Industrial countries
Largest recipients of TARP funds
Banks that borrowed funds under TARP
Amount
Borrowed ($bn)
Citigroup
Bank of America/Merrill Lynch
JPMorgan Chase
Wells Fargo
50
45
25
25
Goldman Sachs
Morgan Stanley
U.S. Bancorp
Bank of New York Mellon Corp.
10
10
6.6
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
Total retail sales
Motor vehicles and
parts
Source: Thomson/Datastream, Commerce Department.
Core inflation falling
Japanese consumer prices, year-over-year percent change
Headline inflation
Core inflation
Source: Thomson/Datastream, OECD.
ECB interest rate and Inflation
Eurozone consumer prices, year-over-year percent change
ECB Interest rate
Headline inflation
Core inflation
Source: Thomson/Datastream, OECD.
Japanese exports to China
In Billion Yen
Exports to China (RHS)
Total exports, excluding China (lhs)
Source: Thomson/Datastream
Unemployment close to 2003 Level
Percentage of labor force
5.5
Unemployment rate
5.0
4.5
4.0
3.5
Jan-00
Jul-01
Jan-03
Jul-04
Source: Thomson/Datastream
Jan-06
Jul-07
Jan-09
Euro Area Q1- Sharply lower as stock
building turns negative
growth of real GDP, and contributions to growth in percentage points
Stocks
Government
Consumption
Investment
Net Exports
Source: Eurostat
Leading indicators for Europe lag those
for the OECD
OECD composite leading indicators
OECD
Germany
Source: Thomson/Datastream, OECD.
Retail sales in U.S. weaken after initial
rebound
U.S. retail sales values, index, Aug. 2009=100
Total retail sales
Motor vehicles and
parts
Source: Thomson/Datastream, Commerce Department.
Japanese Industrial Production
Volume Index, 2005 = 100
120
Industrial Production
110
100
90
80
70
60
Jan-07
May-07
Sep-07
Jan-08
Source: Thomson/Datastream
May-08
Sep-08
Jan-09
European unemployment begins
to pick up quickly on soft economy
number of unemploymed (millions) [L], unemployment rate (%) [R]
Unemployment rate [R]
# of unemployed [L]
Source: Eurostat.
German factory orders moving
towards a bottom in February?
factory orders, domestic and export, ch% saar
domestic orders
Total
export orders
Source: Bundesbank.
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
Latin America
South Asia
Europe and Central Asia
Source: Thomson/Datastream, DECPG.
NIEs and Thailand record positve
monthly IP gains
industrial production ch% (m/m seasonally adjusted)
Korea
Thailand
Hong Kong (SAR, China)
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
OPEC Production [R]
Oil price
[L scale]
Source: IEA and DECPG Commodities Group.
World Oil Consumption Growth
(mb/d y/y)
OECD
Non-OECD
Source: IEA and DECPG Commodities Group.
M bbl
U.S. crude oil stocks rise
on weak demand
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
‘000 tons
$/ton
Copper price
LME stocks
Source: LME and DECPG Commodities Group.
Consumption Growth (% y/y)
Aluminum
Copper
Crude Oil
World China World China World China
2002-06
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
average
Source: DECPG Commodities Group.
International Finance
Capital flows down by two-thirds
from first-quarter 2008 levels
Gross capital flows to emerging markets
$ billion
2007
2008
Q1 Total
Total
2009
Q1 Total
Jan
Feb
Mar
Q1
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
42
156
19
90
9
3
4
17
20
45
5
20
5
3
2
10
79
247
36
157
5
1
0
5
27
64
2
35
2
1
0
3
24
188
38
98
8
4
2
14
8
23
3
7
2
3
0
5
11
61
11
44
0
1
2
3
Lat. America
Bonds
E. Europe
Bonds
Asia
Bonds
Others
Source: DECPG Finance Team.
Strong returns to EM equities in 2009
Total returns yr to date in local currency, %
MSCI Developed
MSCI EM
MSCI BRIC
EM BIG
Developed HY bond
*as of April 17th
Source: Morgan-Stanley through Thomson/Datastream
Volume of EM IPOs has come to a
standstill since September 2008
capital raised ($bn) [L], number of deals [R]
Capital raised [L]
# of deals [R]
Source: Dealogic
Currencies
Focus
The External Environment for
Developing Countries
April 2009
The World Bank
Development Economics
Prospects Group