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

The External Environment for
Developing Countries
September 2009
The World Bank
Development Economics
Prospects Group
The acute phase of the
Liquidity in global inter-bank markets have
financial
crisis
passed
virtually
returned to
normalhas
conditions
LIBOR-OIS spreads, basis points
G-7 meeting
300
200
Dollar
100
Pre-crisis
USD
average
Euro
0
Source: Thomson/Datastream.
The decline in industrial production
has turned around
industrial production, ch% (saar)
20
10
World
0
Developing
-10
-20
-30
OECD
-40
Jan-08
May-08
Sep-08
Jan-09
May-09
Source: National Agencies through Thomson /Datastream.
Industrial countries
U.S. consumer spending will come
to support GDP outturns for third quarter
real PCE and retail sales growth (saar) [L]; change in employment (‘000, 3mma) [R]
4
100
2
0
0
-100
Real PCE [L]
-2
-200
-4
-6
-300
-8
-400
Retail volumes [L]
-10
-500
-12
-600
-14
-700
-16
Change in employment [R]
-18
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: U.S. Departments of Commerce and Labor.
-800
Sectoral developments have been upbeat
ISM headline Mfgr and Svcs indices [L]; capital goods orders, ch% (saar) [R]
55
20.0
53
10.0
50
Capital goods orders [R]
0.0
48
45
-10.0
43
-20.0
40
ISM Services
38
-30.0
35
ISM Manufacturing
-40.0
33
30
-50.0
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: Institute for Supply Management, Department of Commerce.
U.S. trade developments should offer
modest boost to GDP as well
goods export and import volumes, ch% saar
25.0
12.5
0.0
-12.5
-25.0
Export volumes
-37.5
Import volumes
-50.0
Jan-07
Jun-07
Nov-07
Apr-08
Sep-08
Feb-09
Source: U.S. Department of Commerce.
Jul-09
Japan’s orders, exports and production
take a huge leg up over June and July
core machinery orders, export volumes and mfgr output, ch% saar
60
40
Production
20
Core machinery orders
0
-20
-40
Goods export volumes
-60
-80
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: Bank of Japan and Japan Cabinet Office.
Japan’s exports receive a boost from
improved demand in Asia and United States
contributions
to
growth
of
Japanese
export
volumes
(yr/yr)
20
10
0
-10
Other
Asia
-20
EU
-30
USA
-40
Q1-2008
Q2-2008
Q3-2008
Q4-2008
Q1-2009
Source: Bank of Japan and DECPG calculations.
Q2-2009
Japanese consumer spending retrenches
as labor markets deteriorate quickly
unemployment rate (%) [L]; household spending and retail sales, ch% (y/y) [R]
6.0
3
Household expenditure [R]
2
5.5
1
0
5.0
-1
Retail sales [R]
4.5
-2
Unemployment rate % [L]
-3
4.0
-4
3.5
Jan-07
-5
Jun-07
Nov-07
Apr-08
Sep-08
Feb-09
Source: Japan Cabinet Office.
Jul-09
Euro Area GDP outturns improved
broadly in second quarter
GDP growth Q1-2009 and Q2-2009, ch% (q/q saar)
Denmark
Greece
France
Ireland
Portugal
Spain
Belgium
EURO AREA
Austria
Italy
Netherlands
Germany
-16
-12
-8
Q2-2009
-4
0
Q1-2009
Source: European Commission and Eurostat.
4
German and French exports breach into
positive territory, underpinning production
goods export volumes ch% (saar)
40
20
France
0
-20
-40
Germany
-60
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Source: Eurostat.
Apr-09
Jul-09
Household spending remains weak
as spillovers from trade await
consumer spending volumes, ch% (yr–on-yr)
2.5
Germany
0.0
-2.5
Italy
France
-5.0
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Source: EUROSTAT.
Apr-09
Jul-09
Industrial production
The pace of decline in industrial
production has turned around
industrial production, ch% (saar)
20
10
World
0
Developing
-10
-20
-30
OECD
-40
Jan-08
May-08
Sep-08
Jan-09
May-09
Source: National Agencies through Thomson /Datastream.
East Asia in the fore, with a general
uptrend across all regions
industrial production, ch% (saar)
30
Industrial production, percentage change (saar)
East Asia &
Pacific
Middle-East & North Africa
20
South
Asia
10
Developing
0
-10
-20
Latin America
-30
-40
Europe & Central Asia
-50
Jan-08
May-08
Sep-08
Jan-09
May-09
Source: National Agencies through Thomson /Datastream.
Growth recovery fastest among countries
that had steepest declines– levels depressed
industrial production
100
Oil producing countries
95
90
Other MIC's and
HIC's (incl LAC
Resource exporters,
US, UK)
85
80
Capital goods exporters
Countries with
large imbalances
and/or affected via
trade channels
75
70
2008 Peak
2008/09 Trough
Latest data point
Source: World Bank, DEC Prospects Group
International trade
100
China's trade surplus down on
surging imports
450
Trade balance $bn annualized [R]; exports and imports, ch% saar [L]
80
400
Imports [L]
60
Exports [L]
350
40
20
300
0
250
-20
200
-40
-80
Jan-07
150
Balance of trade [R]
-60
100
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Source: National Agencies through Haver Analytics.
Global trade volumes stabilize at
low levels
World export and import volumes, ch%, saar
20
10
0
-10
Exports
Imports
-20
-30
-40
-50
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
Source: Netherlands Central Plan Bureau (CPB).
May-09
U.S. current balance improves
further in second quarter to 2.8% of GDP
billions U.S. dollars
100
Income
50
Services
0
Non-oil
BOT
-50
Oil balance
-100
Transfers
-150
-200
-250
Current account
-300
Q2-2008
Q3-2008
Q4-2008
Q1-2009
Source: Department of Commerce.
Q2-2009
Oil prices
$/bbl
Oil prices supported by improving
fundamentals
mb/d
140
32
OPEC-11 Production [R]
31
120
30
100
29
80
28
60
27
Oil price
40
[L scale]
26
20
Jan-03
25
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Source: IEA and DECPG Commodities Group.
U.S. crude oil inventories decline but
remain
high
M bbl
370
5-year high-low ranges
360
350
340
330
320
310
300
290
280
270
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Source: U.S. Department of Energy and DECPG Commodities Group.
WTI Futures Prices - NYMEX
Monthly contract prices to Dec 2014*
for select dates in 2009
$/bbl
90
Jun 11
80
70
Jul 13
Sep 11
60
50
40
30
Jan-09
Feb 18
Jan-10
Jan-11
Jan-12
Jan-13
Source: NYMEX.
Jan-14
Non-oil commodity prices
Agriculture prices higher on sharp
gains in sugar, rubber and fats & oils
(2000=100)
300
275
Food
250
Beverages
225
200
175
150
125
Jan-06
Raw Materials
Jan-07
Jan-08
Jan-09
Source: DECPG Commodities Group.
Jan-10
Metals prices increase on supply
constraints
$/ton
$/ton
9,000
8,000
55,000
50,000
Copper
45,000
7,000
40,000
6,000
Nickel
5,000
35,000
30,000
4,000
25,000
3,000
20,000
2,000
1,000
15,000
Lead
10,000
0
5,000
Source: LME and DECPG Commodities Group.
Gold prices rise on concerns about
the dollar, inflation and the economy
per toz
1100
Gold in USD
1000
900
800
700
600
Gold in euros
500
400
Jan-07
Jan-08
Dec-08
Source: LME and DECPG Commodities Group.
International Finance
Flows slowed in August in the wake of
a surge in July bond issuance
Gross capital flows to emerging markets
$ billion
2007
2008
2009
Total
H1
H1
Jun
July
Aug
YTD
652
258
389
315
112
23
38
11
159
Bonds
146
53
65
60
38
3
18
3
57
Banks
312
151
257
192
40
8
7
4
52
Equity
194
54
68
62
33
12
13
4
51
156
61
90
75
36
8
12
1
49
Bonds
45
17
20
18
15
2
6
1
22
E. Europe
247
99
157
124
22
5
13
3
39
Bonds
64
27
35
33
13
1
10
1
24
188
69
98
81
46
10
11
6
61
23
7
7
7
8
0
1
1
8
61
28
44
35
7
1
1
1
10
Total
Lat. America
Asia
Bonds
Others
Total Jan-Aug
Source: DECPG Finance Team.
Emerging Market bond spreads
continue to narrow
basis points
1200
Corporate spread
CEMBI
1000
800
600
400
Sovereign spread
EMBI
200
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Source: JPMorgan-Chase.
Sep-09
Global equities continue uptrend
MSCI indexes, Jan-2008 = 100.
150
Emerging markets
140
130
120
110
100
Developed markets
90
80
70
Jan-09
Mar-09
May-09
Source: Bloomberg.
Jul-09
Sep-09
Currencies
Dollar depreciation accelerates
over August and September
USD per Euro (inverse) [Left] and Yen per USD [right]
Jul-08
1.230
1.270
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
USD/Euro (inverse)
1.310
110
106
1.350
102
1.390
1.430
98
1.470
94
1.510
1.550
yen/USD
90
1.590
1.630
Source: Thomson/Datastream.
86
Euromarket interest differentials
move against the greenback
difference: USD 6-month LIBOR and EURIBOR 6-months (basis points)
0.30
0.20
US LIBOR - EURIBOR
0.10
0.00
-0.10
-0.20
-0.30
-0.40
-0.50
-0.60
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Source: Thomson/Datastream.
Aug-09
Sep-09
Emerging market currencies
continue gains against U.S. dollar
percentage change (USD per LCU) (%)
Chn RMB
Second quarter 2009
Phl pso
Third quarter 2009
Thai bht
Stronger Local Currency
Ind Rpe
Tur lra
Pol zty
Rus rbl
Mex pso
Indo rph
Kor won
Brz rei
ZAF Rand
0
5
10
Source: Thomson/Datastream.
15
The External Environment for
Developing Countries
September 2009
The World Bank
Development Economics
Prospects Group