Transcript The External Environment for Developing Countries December 2009 The World Bank Development Economics Prospects Group.

The External Environment for
Developing Countries
December 2009
The World Bank
Development Economics
Prospects Group
G-3 exports now growing at double
digits… a good omen for world trade
U.S. - Japan and Germany export volumes, ch% 3m/3m saar
60
40
United States
20
Germany
0
-20
-40
Japan
-60
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: World Bank, DEC Prospects Group.
Oct-09
Gross capital flows increase rapidly in the
final months of 2009
bond issuance, IPOs and syndicated bank lending, 3mma, billions US dollars
50
Latin America
Europe and Central Asia
SubSaharan Africa
40
East Asia
South Asia
MENA
30
20
10
0
Mar
Apr
May
June
July
Aug
Sep
Oct
Source: World Bank, Development Prospects Group.
Nov
Industrial countries
U.S. GDP marked down for third quarter
to 2.8% on consumer and exports
growth of real GDP, and contributions to growth in percentage points
6
3.5
4
2.8
2
0
-0.7
Stocks
Government
Consumption
Investment
Net exports
-2
-4
-6
Q2-2009
Q3-2009 Prelim
Source: Department of Commerce.
Q3-2009 2nd
Narrowing of job losses in November
with new claims down substantially
change in employment (‘000, 3mma) [L]; claims for UNR insurance (‘000, 4wma) [R]
100
700
0
650
-100
change in employment [L]
600
-200
550
-300
500
-400
450
-500
400
-600
350
-700
claims for unemployment insurance [R]
-800
Jan-08
300
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: U.S. Department of Labor.
Oct-09
Housing makes some progress in
pulling out of recession– but risks remain
new and existing home sales, (ch% 3mma y/y) [L]; “Affordability index” [R]
15
180
Affordability index [R]
0
160
Existing home sales [L]
-15
140
New home sales [L]
-30
120
-45
100
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Source: Department of Commerce and National Association of Realtors.
Japan’s GDP growth marked down sharply to
1.3% in Q3-09 on invenstment
growth of real GDP, and contributions to growth in percentage points
8
4.8
4
2.7
1.3
0
Net Exports
Stocks
Consumption
Government
Investment
-4
-8
Q2-2009
Q3-2009 Prelim
Source: Japan Cabinet Office.
Q3-2009 Revised
Japanese exports increase as demand
from the U.S. and Europe comes into play
U.S. imports, Japan exports, (nominal USD) Japan IP-mfgr, ch% 3m/3m saar
80
60
Japan exports
Japan IP mfgr
40
20
U.S. imports
0
-20
-40
-60
-80
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: World Bank, DEC Prospects Group.
Oct-09
Japan’s deflation has yet to abate
prompting BOJ liquidity provisions
Tokyo consumer prices [left]; corporate goods prices (PPI) [right], ch% y/y
3
8
6
corporate goods prices [R]
2
4
1
2
0
0
-2
-1
-4
-6
-2
consumer prices [L]
-8
-3
Jan-97
-10
Sep-98
May-00
Jan-02
Sep-03
May-05
Jan-07
Source: Japan Cabinet Office.
Sep-08
Euro Area GDP up 1.5% in Q3-09 (saar)
on investment and stocks
growth of real GDP, and contributions to growth in percentage points
4
1.5
2
-0.6
0
-2
Net Exports
Stocks
Government
Consumption
Investment
-4
-6
-8
-9.2
-10
Q1-2009
Q2-2009
Source: Eurostat.
Q3-2009 prelim
Drivers for European growth
continue mixed & uneven
GDP growth, third Quarter 2009 (ch%, saar)
6
4
2
0
-2
-4
-6
GDP
PCE
GDI
Net-X *
-8
Euro Area
Germany
France
Source: Eurostat. * contribution to growth.
U.K.
Euro Area sentiment buoyed by
emergence from recession
IFO survey (overall and expectations) [left]; Euro Area consumer confidence [right]
Euro Area Consumer Confidence [R]
-10
113
-15
100
-20
-25
88
IFO- expectations [L]
-30
IFO- overall [L]
75
Jan-08
-35
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: IFO and European Commission.
Oct-09
Industrial production
World output recovering at a brisk pace
growth of industrial production, ch% y/y and saar
15
Momentum (3m/3m saar)
10
5
0
-5
-10
-15
Year-on-year growth
-20
-25
-30
Jan-00
Jul-01
Jan-03
Jul-04
Jan-06
Jul-07
Source: World Bank, DEC Prospects Group.
Jan-09
China’s output growth is slowing
industrial production growth, ch% y/y and saar
35
Momentum (3m/3m saar)
30
25
20
15
10
5
Year-on-year growth
0
-5
-10
Jan-00
Jul-01
Jan-03
Jul-04
Jan-06
Jul-07
Source: World Bank, DEC Prospects Group.
Jan-09
Brazil’s IP grounded in domestic demand
industrial production growth, ch% y/y and saar
30
Momentum (3m/3m saar)
20
10
0
-10
Year-on-year growth
-20
-30
-40
-50
Jan-00
Jul-01
Jan-03
Jul-04
Jan-06
Jul-07
Source: World Bank, DEC Prospects Group.
Jan-09
International trade
Imports strengthened in high income
countries over the third quarter
import volumes, 3 mma seasonally adjusted percent change
60
Developing imports
40
HIY imports
20
0
-20
-40
-60
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: World Bank, DEC Prospects Group.
Oct-09
U.S. trade deficit narrows on stronger
exports and lower oil imports
balance
of
trade
(annualized),
and
deficit
minus
oil,
$
billion
0
-200
Annualized deficit
Deficit minus oil
-400
-600
-800
-1000
-1200
Jan-07 May-07 Sep-07
Jan-08 May-08 Sep-08
Jan-09 May-09 Sep-09
Source: U.S. Department of Commerce.
Developing countries’ exports return
to year-over-year growth in October
Export volumes, year-over-year percent change
20
10
0
-10
-20
-30
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: World Bank, DEC Prospects Group.
Oct-09
Oil prices
Oil prices and OECD oil stocks
$/bbl
million bbl
140
2,800
OECD stocks [R]
120
2,700
100
2,600
80
60
2,500
40
Oil price
[L scale]
2,400
20
0
Jan-96
2,300
Jan-98
Jan-00
Jan-02
Jan-04
Jan-06
Jan-08
Source: IEA and DECPG Commodities Group.
mb/d
World oil consumption growth
million barrels per day
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
Other
Oth Asia
China
OECD
Total
Source: IEA
-3.0
1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 4Q09 4Q10
WTI Futures Prices - NYMEX
Monthly contract prices to Dec 2014*
for select dates in 2009
$/bbl
100
Nov 30
90
80
DEC 10
Nov 9
70
Jul 13
60
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
* Futures now extend to December 2018
Jan-14
Non-oil commodity prices
Agriculture prices strengthen on
grains and beverages
(2000=100)
non-oil prices, index 2000=100.
350
Fats & Oils
300
Grains
Beverages
250
200
Other Food
150
100
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Source: Datastream and DECPG Commodities Group.
Copper prices and LME stocks
‘000 tons
$/ton
9,000
8,000
1,000
Copper price
900
800
7,000
700
6,000
600
5,000
500
4,000
400
3,000
LME stocks
300
200
2,000
100
1,000
0
Source: LME and DECPG Commodities Group.
Global steel production rebounds
mil tons
60
Other
China
Other Asia Pacific
50
40
30
20
10
0
Jan-98
Jan-00
Jan-02
Jan-04
Jan-06
Jan-08
Source: DECPG Commodities Group.
Jan-10
International Finance
Flows to emerging markets ease to a
still-strong $35 billion in November
Gros s capital flow s to de ve loping countrie s
$ b illion
2008
2009
H1
Q3
Total
H1
Q3
Oct Nov YTD
258
82
390
109
94
53
35
291
Bonds
53
9
65
35
33
27
12
107
Banks
151
63
257
42
29
6
9
85
Equity
54
10
68
32
32
20
14
98
61
18
90
37
34
30
8
109
17
1
20
15
18
17
6
55
99
35
157
22
19
9
8
58
27
7
35
13
11
5
4
32
69
18
98
44
32
12
16
105
7
0
7
6
3
5
2
16
28
11
45
7
8
2
2
19
Total
Lat. America
Bonds
E. Europe
Bonds
Asia
Bonds
Others
Source: DECPG Finance Team.
14
Terms of borrowing
for EM bond issuance have improved
average maturity in years [L]; average launch spreads (bps) [R]
600
cost of borrowing [right]
12
500
10
8
400
6
300
4
2
200
2007 Q1
2007 Q3
2008 Q1
2008 Q3
2009 Q1
2009 Q3
Source: Bloomberg and DECPG staff calculations.
Robust returns to EM equities in 2009
Year-to date
December
15
30
MSCI EM
Developed high-yield
CEMBI1
EM bond (EMBIG)
MSCI Developed
Commodities
U.S. Govt Bond
-15
0
45
Source: JPMorgan-Chase and Reuters.
60
Currencies
Dollar jumps in response to favorable
jobs numbers and BOJ’s QE
USD per Euro (inverse) [Left] and Yen per USD [right]
Oct-08
1.230
1.270
Jan-09
Apr-09
Jul-09
Oct-09
105.00
USD/Euro (inverse)
102.50
1.310
100.00
1.350
97.50
yen/USD
1.390
95.00
1.430
92.50
1.470
90.00
1.510
87.50
1.550
Source: Thomson/Datastream.
85.00
Recent pickup in net capital flows to U.S.
shows distinct flight to quality
net flows: U.S. Treasuries, private securities (bn$ 3mma)
100
80
60
Total net inflow
40
Treasuries
20
Private sector securities
0
-20
Jan-08
May-08
Sep-08
Jan-09
May-09
Source: U.S. Treasury TICs Database and JP Morgan-Chase.
Sep-09
EM nominal effective exchange rates
move toward appreciation
NEERs, index Jan-2007 = 100.
130
120
110
Brazil
Turkey
100
90
80
India
South Africa
70
Source: World Bank, DECPG.
Mexico
The External Environment for
Developing Countries
December 2009
The World Bank
Development Economics
Prospects Group