Transcript The External Environment for Developing Countries February 2010 The World Bank Development Economics Prospects Group.

The External Environment for
Developing Countries
February 2010
The World Bank
Development Economics
Prospects Group
European growth outturns disappoint
in fourth quarter
growth of real GDP, ch% saar
6
5
Q2-2009
Q3-2009
Q4-2009
4
3
2
1
0
-1
United States
Japan
Euro Area
Source: National Agencies.
Industrial countries
U.S. GDP growth jumps 5.7% in Q4-09
on stocks, investment and exports
growth of real GDP, and contributions to growth in percentage points
5.7
6
4
2.2
2
0
-0.7
-2
-4
Q2-2009
Prv Consumption
change in Stocks
Q3-2009
Gvt Consumption
Net Exports
Q4-2009
Fixed Investment
GDP
Source: U.S. Department of Commerce.
Improvements in labor markets continue to
underpin increases in household outlays
change in employment (‘000, 3mma) [L]; retail sales x autos, ch% (saar) [R]
100
10
retail x autos [R]
0
5
-100
0
-200
-300
-5
-400
-10
-500
-15
-600
-20
-700
change in employment [L]
-800
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Source: U.S. Departments of Labor and Commerce.
-25
Jan-10
U.S. exports up on increased overseas
demand- net-X likely to add to growth
export and import volumes, ch% saar
40
30
Exports
Imports
20
10
0
-10
-20
-30
-40
-50
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Source: U.S. Department of Commerce.
Oct-09
Japan’s GDP regains dynamic in Q4-09
on turn in capex to positive growth
10
growth of real GDP, and contributions to growth in percentage points
8
6
5.2
4.6
4
2
0.0
0
-2
-4
-6
Q2-2009
Prv Consumption
change in Stocks
Q3-2009
Gvt Consumption
Net Exports
Q4-2009
Fixed Investment
GDP
Source: Japan Cabinet Office, EPA.
Tankan for fourth quarter underlined a
likely pick-up in investment
business conditions dispersion indices
30
20
10
0
-10
-20
-30
-40
-50
-60
Q1 2007
Q3 2007
Large Mfg
Q1 2008
Small Mfg
Q3 2008
Q1 2009
Large non-Mfg
Source: Bank of Japan.
Q3 2009
Small non-Mfg
Japan’s orders and exports revive
in the last months of 2009
machinery orders, production and export volumes ch% (saar)
70
Production
50
Orders
30
Exports
10
-10
-30
-50
-70
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Source: Japan- METI.
Jul-09
Oct-09
Euro-Area growth held to 0.3%
in Q4-09 on flat outturns for Germany
growth of real GDP, ch% saar
3
Q2-2009
Q3-2009
Q4-2009
2
1
0
-1
Euro Area
Germany
Source: EuroStat.
France
European unemployment escalates
continuing to dampen household spending
Euro Area unemployment rate (%) [L]; retail sales volume, ch% (3mma, y/y) [R]
10.0
1
9.5
unemployment rate [L]
0
9.0
8.5
-1
8.0
retail sales [R]
-2
7.5
7.0
-3
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Source: Eurostat.
Jul-09
Oct-09
German factory orders hit hard
leading to weaker output growth
export orders, manufacturing production, ch% (saar)
50
Production
Export orders
30
Domestic orders
10
-10
-30
-50
-70
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Source: Bundesbank.
Jul-09
Oct-09
Industrial production
Eurozone lost growth momentum in the
fourth quarter on weak domestic demand
industrial production (percent change, saar)
20
Eurozone
10
ECA
0
-10
-20
-30
-40
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Source: World Bank calculations based on Thomson Datastream data.
BICS production momentum supported by
strong domestic and external demand
industrial production (percent change, saar)
40
20
0
-20
Brazil
India
China
-40
South Africa
-60
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Source: World Bank calculations based on Thomson Datastream data.
European and African emerging markets factory
PMI above 50 “growth mark” in January
Index sa, 50+ = Expansion
55
50
45
40
35
Czech Rep.
Russia
Hungary
Turkey
Source: JPMorgan-Chase.
Poland
South Africa
International trade
Imports by the United States and China
revive on fiscal stimulus measures
value of imports, year-over-year percent change
60
China year-over-year growth
USA year-over-year growth
40
20
0
-20
-40
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Source: U.S. Department of Commerce; Haver Analytics.
Increasing demand for capital- and
consumer durable goods underpins
exports of manufactures
Manufacturing exports in value terms, year-over-year % change
50
40
30
Israel
Mexico
20
Philippines
Turkey
10
0
-10
-20
-30
-40
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Source: Haver Analytics.
Jul-09
Oct-09
European exports boost region’s
trade surplus to 5 year peak
Euro Area exports & imports, ch% saar, and trade balance in billion euros
BOT €bn [R]
40
Exports ch% [L]
Imports ch% [L]
7
30
5
20
3
10
1
0
-1
-10
-3
-20
-30
-5
-40
-7
-50
-9
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Source: EuroStat.
Jul-09
Oct-09
Oil prices
Crude oil prices relatively flat
in recent months
$/bbl
150
125
100
WTI
75
Brent
50
Dubai
25
Source: Thomson/Datastream and DEC Prospects Group.
OECD total oil stocks
days of forward consumption
62
60
58
56
54
52
50
48
4Q99
4Q01
4Q03
4Q05
Source: IEA and DECPG.
4Q07
4Q09
OPEC spare capacity (mb/d)
7
6
5
4
3
2
1
0
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Source: IEA and DECPG.
Jan-08
Jan-09
Jan-10
Non-oil commodity prices
Agriculture prices buoyed by strong gains
in rubber and sugar
(Index 2000=100)
300
Food
250
200
Beverages
150
Raw Materials
100
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Source: DECPG.
Jan-08
Jan-09
Jan-10
Metals prices fall sharply in early 2010
$/ton
5,000
Zinc
4,000
Lead
Aluminum
3,000
2,000
1,000
0
Source: LME and DECPG.
$/ton
Metals stocks continue to increase
as markets remain in surplus
‘000 tons
9,000
1,000
8,000
900
800
7,000
700
6,000
5,000
600
Copper price
400
4,000
300
3,000
200
2,000
1,000
500
100
LME stocks
Source: LME and DECPG.
0
International Finance
Bonds underpin January flows
$ billion
2008
H1
Total
H2 Total
Jan
H1
258
132
390
24
Bonds
53
12
65
9
36
Banks
151
106
257
9
Equity
54
14
0
68
6
61
29
90
10
Bonds
17
3
20
5
15
E. Europe
99
57
157
4
Bonds
27
7.7
35
69
29
7
28
Lat. America
Asia
Bonds
Others
2010
2009
H2
110 243
Dec Total
Jan
47
353
33
80
7
115
21
43
86
29
128
5
32
77
11
109
7
37 100
21
137
8
47
5
62
7
22
50
8
72
13
2
13
20
1
33
7
98
9
44
78
15
122
11
0
7
2
6
10
0.1
16
7
17
45
1
7
14
2
21
0.2
Source: DECPG.
Sovereign debt default risk has soared
notably for several EU countries
5-year sovereign CDS
spreads (basis points)
Current level
(as of Feb. 15)
Before Greece debt
crisis (end Oct-09)
Pre-Lehman
(Sep. 12 2008)
45
52
61
81
92
130
139
158
193
354
21
19
23
60
50
74
72
138
58
140
9
10
12
17
22
44
40
31
41
53
85
140
140
146
170
198
202
203
80
137
168
116
150
192
190
178
72
155
134
72
191
168
276
240
Developed countries:
Germany
U.S.
France
Japan
U.K.
Italy
Spain
Irealnd
Portugal
Greece
Emerging mark ets:
China
Brazil
Mexico
Poland
South Africa
Russia
Turkey
Philippiness
Source: Bloom b erg and World Bank staff calculations
Source: Bloomberg and DECPG staff calculations.
EM equities underperform mature
markets over 2010 to date
Local currency returns by period
-0.5
-1.5
-2.5
-3.5
-4.5
-5.5
Mature markets
Emerging markets
EU
U.S.
-6.5
January
February*
Year to date*
*through February 15
Source: Bloomberg and DECPG staff calculations.
Currencies
Euro down 6.5% vs dollar in the month
on Greek sovereign debt plight
USD per Euro (inverse) [Left] and Yen per USD [right]
Jan-09
1.230
1.270
Apr-09
Jul-09
Oct-09
Jan-10
105.00
USD/Euro (inverse)
102.50
1.310
100.00
1.350
97.50
1.390
95.00
1.430
92.50
1.470
90.00
1.510
87.50
1.550
yen/USD
Source: Thomson/Datastream.
85.00
Euro cross rates vary by trade partner
broadly based on economic conditions
Ch% 2010 to date
Japanese yen
ch% 2009
Negative sign implies decline
in local currency vs euro
U.S. dollar
Czech krona
Hungarian florint
Turkish lira
Russian rouble
Polish zloty
-25
-20
-15
-10
-5
0
5
Source: Thomson/Datastream and World Bank.
10
The External Environment for
Developing Countries
February 2010
The World Bank
Development Economics
Prospects Group