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March 18, 2010 The External Environment for Developing Countries Overview This brief was prepared by the Development Economics Prospects Group (DECPG) and colleagues in PRMTR, ECA (Moscow) and IFC (Risk/Economics) led by Elliot (Mick) Riordan. The team is comprised of Riordan (OECD, currencies), Nadia Spivak, Sta- cey Chow (trade), Shane Streifel (commodities), Eung Ju Kim (finance), Cristina Savescu (IP) and Sabah Mirza (Annex). Zeljko Bogetic (ECA) provided a review of Russia, and Facundo Martin, Jean-Pierre Lacombe (IFC) authored the Focus section this month. Andrew Burns provided overall guidance. This note is not formally cleared by the World Bank Group. March 2010 The global recovery continues to gain momentum; but increasingly domestic, country- specific factors are coming to play a much larger role in the shape of recovery. While fourth quarter GDP growth was strong in the United States (reflecting strong exports, fiscal stimulus and the inventory cycle) and Japan (due to robust exports, production and the beginning of spillovers to busi- ness investment and household spending), industrial production growth in China (where the inventory cycle is more mature) appears to be slowing. And in Europe growth stalled, in part because spending incentives are coming to an end; the weight of high unemployment is depressing consumer sentiment, and the financial sector remains weak. As a result, the Euro Area is now lagging in recovery, and a fall- back to recession cannot be ruled out. Growth in world exports and production is stepping up, as high-income countries find receptive markets for capital goods and durables. Japanese export volumes surged to 40% growth in January from a decline of 22% during the third quarter of 2009 (saar), on the back of increas- ing demand in China and Asia. In similar fashion, U.S. exports registered 28% gains (saar), helping to spur manufacturing output, with glimmers of employment growth on the horizon. For developing coun- tries as a group, exports have stepped up to 38% in December. But despite robust growth, levels of trade and production still remain below pre-crisis figures (2007) by 27-and 18 percent respectively, high- lighting the toll taken on world economic activity by the financial crisis. Following the surge of capital flows toward the end of last year, inflows to developing countries have eased but remain about 48% higher than a year ago. Flows remain, however, 49% below their levels in 2007. Bank lending is especially weak, leading a larger number of emerging market corporates to tap the bond market. And sovereign spreads have narrowed from this year’s high 341 basis points in early February to 271 points at present. The Focus section reviews the Greek debt situation and implications for developing countries, with a brief look at banking exposures of Greek institutions, their claims and liabilities. Japan‟s exports to China surge to 80% growth export volumes: Japan to China, other Asia and ROW, ch% (yr/yr) -60 -30 0 30 60 90 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Total exports China Other Asia Rest of World Source: Japan- METI. Though recovering, production remains below pre-crisis peaks in most countries percentage difference from peak pre-crisis level -30 -25 -20 -15 -10 -5 0 5 10 15 20 Source: World Bank calculations based on Thomson Datastream data
25

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Page 1: Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 ...pubdocs.worldbank.org/en/786561473175477596/Global-Monthly-M… · Source: DECPG, March 2010. Estimates and projections

March 18, 2010

The External Environment for Developing Countries

Overview

This brief was prepared by the Development Economics Prospects Group (DECPG) and colleagues in PRMTR, ECA (Moscow)

and IFC (Risk/Economics) led by Elliot (Mick) Riordan. The team is comprised of Riordan (OECD, currencies), Nadia Spivak, Sta-

cey Chow (trade), Shane Streifel (commodities), Eung Ju Kim (finance), Cristina Savescu (IP) and Sabah Mirza (Annex). Zeljko

Bogetic (ECA) provided a review of Russia, and Facundo Martin, Jean-Pierre Lacombe (IFC) authored the Focus section this

month. Andrew Burns provided overall guidance. This note is not formally cleared by the World Bank Group.

March 2010

The global recovery continues to gain momentum; but increasingly domestic, country-

specific factors are coming to play a much larger role in the shape of recovery. While

fourth quarter GDP growth was strong in the United States (reflecting strong exports, fiscal stimulus and

the inventory cycle) and Japan (due to robust exports, production and the beginning of spillovers to busi-

ness investment and household spending), industrial production growth in China (where the inventory

cycle is more mature) appears to be slowing. And in Europe growth stalled, in part because spending

incentives are coming to an end; the weight of high unemployment is depressing consumer sentiment,

and the financial sector remains weak. As a result, the Euro Area is now lagging in recovery, and a fall-

back to recession cannot be ruled out.

Growth in world exports and production is stepping up, as high-income countries find

receptive markets for capital goods and durables. Japanese export volumes surged to 40%

growth in January from a decline of 22% during the third quarter of 2009 (saar), on the back of increas-

ing demand in China and Asia. In similar fashion, U.S. exports registered 28% gains (saar), helping to

spur manufacturing output, with glimmers of employment growth on the horizon. For developing coun-

tries as a group, exports have stepped up to 38% in December. But despite robust growth, levels of

trade and production still remain below pre-crisis figures (2007) by 27-and 18 percent respectively, high-

lighting the toll taken on world economic activity by the financial crisis.

Following the surge of capital flows toward the end of last year, inflows to developing

countries have eased but remain about 48% higher than a year ago. Flows remain, however,

49% below their levels in 2007. Bank lending is especially weak, leading a larger number of emerging

market corporates to tap the bond market. And sovereign spreads have narrowed from this year’s high

341 basis points in early February to 271 points at present.

The Focus section reviews the Greek debt situation and implications for developing countries,

with a brief look at banking exposures of Greek institutions, their claims and liabilities.

Japan‟s exports to China surge to

80% growth export volumes: Japan to China, other Asia and ROW, ch% (yr/yr)

-60

-30

0

30

60

90

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

Total exports

China

Other Asia

Rest of World

Source: Japan- METI.

Though recovering, production remains

below pre-crisis peaks in most countriespercentage difference from peak pre-crisis level

-30

-25

-20

-15

-10

-5

0

5

10

15

20

Source: World Bank calculations based on Thomson Datastream data

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March 18, 2010

page 2 External Environment for Developing Countries

Global Indicators

Global Indicators

(Percentage change per annum, unless otherwise specified)

2007 2008 2009e 2010f

GDP volume: World 3.9 1.7 -2.2 2.7

Memo item: World GDP at PPP weights 5.0 2.7 -1.0 3.5

High-income countries 2.6 0.4 -3.3 2.3

Developing countries 8.1 5.6 1.2 5.2

Industrial production: World 4.7 0.6 -8.0 ...

High-income countries 2.6 -1.8 -12.8 ...

Developing countries 9.7 6.0 1.7 ...

Export volume (GNFS): World 7.2 3.0 -14.4 4.3

High-income countries 6.2 2.1 -15.4 3.4

Developing countries 9.8 5.3 -11.7 6.4

Trade Prices ($): Manufacturing (MUV) 5.5 6.0 -4.9 1.5

Oil ($/bbl) 71.1 97.0 61.8 76.0

Non-oil commodities 17.1 21.0 -21.6 5.3

Nominal interest rates:

$LIBOR (6m percent p.a.) 5.20 3.20 1.15 1.80

€LIBOR (6m percent p.a.) 4.30 4.80 1.50 2.20

Financial flows

FDI ($billion) 520 583 ... ...

Gross Capital flowsa ($billion) 652 389 289 353353353

Equity placement ($bn) 194 68 84 109109109

Bond financing ($bn) 146 65 151 115115115

Lending ($bn) 312 257 54 128128128

Source: DECPG, March 2010. Estimates and projections for 2009 and 2010 based on GEP-2010, released January 21, 2010.

Note: a. Gross inflows 2010 based on preliminary year-to-date figures. Figures in bold represent changes this month.

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March 18, 2010

page 3 External Environment for Developing Countries

OECD countries

Good U.S. growth following bad weather.

The severe winter weather that gripped the Eastern

part of the United States in February put a damper on

recorded output, employment and spending. Produc-

tion gained a solid 0.9% in January (m/m), but will have

subsided in February, as have housing starts and per-

mits. Claims for jobless insurance increased 31,000 in

the week ending February 12—an unexpectedly large

number of layoffs, and employment declined by 36,000

in the month, putting a dent in a long improving trend.

Retail sales inched 0.1% higher in February. But early

indicators for March show improvement, with Federal

Reserve Surveys highlighting increases in order books

and better prospects for employment growth in the

months ahead.

U.S. export performance moves up. A brighter

spot is the improved performance of U.S. exports, as

demand in high-income countries comes to comple-

ment burgeoning imports among developing countries

(see International Trade). Though U.S. exports faltered

in January, momentum remains quite strong, with ex-

port volumes increasing at a 30-35% annualized pace

in the final months of 2009 (saar). Capital goods orders

are now benefitting from both domestic and foreign

demand, and firmed to 16% growth in January from

4.4% as recently as October 2009. Spillovers to factory

output, employment and spending are likely over the

coming months. The recent extension of unemploy-

ment benefits by Congress, together with additional

funding for job creation should facilitate this process.

Stronger view for U.S. and Japan. U.S. and

Japanese GDP were quite strong in the final quarter of

2009. Though stocks accounted for 3.9-of 5.9 points of

growth in the United States, private investment turned

the corner and exports picked up 23% (saar). In Japan,

a mix of strong government and private outlays, to-

gether with 22% export growth provided a better bal-

ance to recovery. Europe has not been so fortunate. A

common positive factor is export strength, but Euro

Area growth of 0.4% in 2009-Q4 lacked support from

household or government spending, and investment

remained in decline. Recent Consensus projections, as

well as those of the EEC have marked down Euro Area

growth to below 1% for 2010.

Vagaries of February weather put a dent in uptrend of retail spending and job loss

change in employment (‘000, 3mma) [L]; retail sales x autos, ch% (saar) [R]

-25

-20

-15

-10

-5

0

5

10

-800

-700

-600

-500

-400

-300

-200

-100

0

100

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10

Source: U.S. Departments of Labor and Commerce.

retail x autos [R]

change in employment [L]

Strong U.S. exports underpin gains in

capital goods orders and productiongoods export volumes and capital goods orders,ch% saar

-50

-40

-30

-20

-10

0

10

20

30

40

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

Capital goods orders

Exports

Source: U.S. Department of Commerce.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jun-09 Aug-09 Oct-09 Dec-09 Feb-10

Market expectations firm for U.SGDP growth in 2010

Consensus mean GDP growth: forecast for 2010 sampled during 2009/10

Source: Consensus Economics LLC.

Forecast Date in 2009/10:

Euro Area

Japan

United States

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March 18, 2010

page 4 External Environment for Developing Countries

Japan‟s export surge. Exports jumped 8.6% in

January (m/m) driving up year-on-year growth in Ja-

pan’s shipments abroad to 40%, the fastest pace in

almost 30 years. External demand for Japanese

automobiles and high-tech equipment in particular

continued to underpin exports and recovery in the

domestic industrial sector. Shipments to the United

States increased for the first time in 2 years (y/y)

while those to China grew in annual terms for a third

month running. More impressive is Japan’s response

to Chinese demand (up 80% y/y), and to other Asian

customers (63% export gains.) But exports outside of

Asia breached into positive territory only in January

to record an 18% advance.

European spending. Unemployment in the Euro

Area remained steady at 9.9% in January. But the

latest report revealed that 38,000 more people were

laid off in the month, bringing the total number of un-

employed persons to 15.7 million. Both business and

consumer confidence have been shaken by Greece’s

debt difficulties, the fall of the euro and stagnation in

German GDP in the final quarter of 2009. The IFO

index of German business confidence dropped for

the first in 11 months; the Italian ISAE consumer con-

fidence index declined for a second month as in-

creasing concern about jobs clouds the economic

outlook. In France, consumer spending fell 2.7% in

January (m/m) as incentives for automobile pur-

chases were reduced. And the bellwether business

index of the Belgian National Bank was unchanged in

February, after gaining for 10 months in succession.

Surprise easing in German shipments. Mo-

mentum of German industrial production slowed over

the last two months to just 1.9% from 13% in the third

quarter (saar), a key element in the downdraft in

GDP witnessed during the final quarter of 2009. A

driving force is a largely unexpected downturn in ex-

port growth from 50% annualized rates in November

2009 to 5% in January 2010 (saar). Severe weather

across Europe may have played a role in dampening

exports by hampering production and freight logis-

tics. But export orders have softened in the last

months, economic conditions remain weak in Central

and Eastern Europe, and the longer trend apprecia-

tion of the euro may be affecting competitiveness

with a lag.

Japan‟s exports to China surge to

80% growth export volumes: Japan to China, other Asia and ROW, ch% (yr/yr)

-60

-30

0

30

60

90

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

Total exports

China

Other Asia

Rest of World

Source: Japan- METI.

Household spending remains the

“Achilles Heel” of European recoveryretail sales volumes, ch% (yr/yr)

-4.5

-3.0

-1.5

0.0

1.5

3.0

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

Euro Area Germany France

Source: Eurostat.

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March 18, 2010

page 5 External Environment for Developing Countries

Country Focus: Russia

The latest macroeconomic data for Russia

conveys a mixed picture. Modest economic recov-

ery continued into the first quarter of 2010 with both trad-

able and non-tradable sectors reporting positive trends.

But unemployment remains at high levels, negatively

affecting income and consumption growth. Credit condi-

tions remain very tight, while banks still struggle with non-

performing and delinquent loans in an attempt to improve

the quality of their assets. Recovery in investment is

slow, mostly in inventories, while capital spending re-

mains depressed, constrained by limited credit availabil-

ity. We expect growth to remain rather weak throughout

2010, driven in large part by modest gains in consump-

tion, and base effects reflecting low levels of activity in the

first two quarters of 2009.

Output measures show continuing recovery.

Production increased 7.8% in January 2010 (y-o-y), with

manufacturing industries reporting growth of 7.6%,

mostly reflecting the low base of 2009. Unemployment is

anticipated to remain around 9% in 2010-Q1 with some

improvement through the year as a result of seasonal

employment. Recent and planned increases and indexa-

tion of pensions, coupled with increased public sector

wages are expected to provide a boost to household

incomes. And retail trade reports modest growth (0.3%)

in January (m/m) after declining 6.1% in the final quarter

of 2009. Inflation continued to ease in February, with CPI

registering 12-month inflation of 7.2%.

Banking and BoP flows sustainable. The cur-

rent account is expected to deteriorate slightly, affected

by stronger import growth and lower oil prices, while the

capital account will remain volatile, largely reflecting un-

certainty regarding resource prices and oil in particular.

Despite fears of widespread defaults, both banking and

non-financial corporate sectors have successfully ser-

viced their debt obligations in 2009. And with access to

external borrowing gradually improving, larger banks and

corporations should be able to finance and/or rollover

their debt obligations in 2010. According to the CBR,

banks will have to pay about $34 billion and corporations

about $70 billion in principal and interest during 2010.

Recent changes in exchange rate management suggest

that the CBR intends to make its policy less predictable

to avoid possible carry-trades and speculation of a fresh

appreciation of the ruble.

Total industrial production

and output of basic industries

Source: Rosstat.

production, ch% (yr/yr)

-20

-15

-10

-5

0

5

10

15

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

IP total

IP basic industsry

Oil price and balance on goods trade Brent crude oil price ($/bbl) [L]; trade balance, $bn [R]

4

6

8

10

12

14

16

18

20

30

40

50

60

70

80

90

100

110

120

130

140

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09

Source: Rosstat, World Bank staff estimates.

balance of trade [R]

crude oil price [L]

Russian equity markets reflect expectations

of stronger global economic recovery

Source: Bloomberg.

S&P-500 and RTS indices

500

1000

1500

2000

2500

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

S&P 500 Index

RTS Index

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March 18, 2010

page 6 External Environment for Developing Countries

Industrial Production

Global manufacturing PMI suggests firms

see stronger demand ahead. The global new

orders PMI remained above the “50”-growth mark,

while the inventory index increased close to its long-

term average in February—notwithstanding adverse

weather conditions that disrupted activity in the

United States and Europe, and the Lunar New Year

celebrations across East Asia. Improved confidence

about the economic recovery has made firms a bit

less concerned about cutting costs, as they rebuild

depleted inventories and give consideration to pay-

rolls, this underscored by the global PMI employ-

ment index, which increased to 51.4 in February, a

second month the employment index exceed the 50-

growth mark. The output PMI retreated to 57.4 in

February from 60.2 in January, but it remains at a

high level, indicating that manufacturing should con-

tinue to expand in the coming months.

China‟s inventory cycle waning? China’s

production growth turned negative in the three

months ending February 2010 (saar), signaling that

its inventory cycle is likely to have run its course, and

that the contribution to growth from replenishment of

stocks has ended. Interpretation of January-February

data is complicated by the timing of the Lunar New

Year celebration—however the slowdown cannot be

disputed. Other emerging economies have yet to

complete the full inventory cycle, as is the case in

South Africa where momentum continues strongly.

Will the slowdown in China’s production act as a

leading indicator for other developing countries?

Expiring auto incentives to weaken manu-

facturing output growth. Several countries that

witnessed strong revival in factory activity in the sec-

ond half of 2009 had auto sale incentive programs as

part of government stimulus measures. As these pro-

grams have recently expired in the United States,

Korea, Australia, and most Euro Zone countries—or

are about to in Brazil, India, and the U.K.—growth in

industrial production is expected to slow in the

months ahead. By effectively front-loading demand,

these programs pushed global car sales to an all-

time high 54.3mn units in January 2010 (seasonally

adjusted annualized rate, JP Morgan).

Leading indicators suggest companies are

gearing up for stronger demandPMI Index sa, 50+ = Expansion

0

10

20

30

40

50

60

70

Feb. 09 Oct. 09 Nov. 09 Dec. 09 Jan. 10 Feb. 10

Output New orders Employment

Source: JPMorgan.

China‟s IP growth leveling off

as its inventory cycle comes to an end

Source: World Bank calculations based on Thomson Datastream data

Industrial production, ch% saar

-40

-30

-20

-10

0

10

20

30

40

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10

China South Africa

0

50

100

150

200

250

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10

Brazil China

Korea India

automobile sales, Q1 2008=100

Industrial output momentum likely to slow as auto sales incentive programs expire

First month of

sales incentives

(Brazil, India)

(China, Korea)

Source: World Bank calculations based on Thomson Datastream data

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March 18, 2010

page 7 External Environment for Developing Countries

International Trade

Global trade on a rebound. Following a sharp

drop in early 2009, trade is recovering. Robust import

demand from developing countries has been driving

this acceleration. Developing countries’ imports in

value terms have been growing faster than high-

income countries. Imports of the former were up at

an annualized pace of 64% in January 2010 (saar),

contrasted with 37% in imports of high-income coun-

tries. Demand from emerging markets has also been

responsible for some 40 percent of the expansion in

global exports. By the end of 2009 exports were ad-

vancing at an annualized rate of 47%. However,

trade has not recovered to its pre-crisis trend. Import

values for both developing and high-income coun-

tries remain about 20% lower than pre-crisis levels.

Trade varies by regions and income

groups. Import and export growth has been far

stronger in developing- than high-income countries.

For developing countries, EAP and LAC showed

strong growth in both imports and exports. Notably,

import growth outpaced export growth in all regions,

with the exception of LAC and ECA. In particular,

import growth for South Asia (SAS) was substantially

higher than export growth, a result of robust demand

in India.

Protectionism remains muted. Since October

2008 the G20 countries implemented 75% of a total

374 trade restrictive measures. But according to a

recent WTO/UNCTAD/OECD report, full-scale esca-

lation of protectionism has largely been averted. The

coverage of trade restrictive policies (new import re-

strictions and trade remedy initiations) has been lim-

ited to about 0.4% of world imports. In addition, G-20

countries have implemented trade liberalizing meas-

ures and terminated trade remedy investigations.

Though initiation of anti-dumping investigations by

G20 countries in 2009 was 21% less than in 2008,

countervailing duty and safeguard investigations

have both increased substantially. Given lags be-

tween initiation and imposition of trade remedies, a

backlog of ongoing investigations could increase the

number of barriers imposed in 2010. And “murky pro-

tectionism” that is more difficult to quantify and cate-

gorize—including state emergency interventions and

“buy local” requirements—remains pervasive.

Trend growth of imports in developing and high-income countriesimports in value, index Aug 2008=100, log scale

0

20

40

60

80

100

120

Jan-00 Sep-01 May-03 Jan-05 Sep-06 May-08 Jan-10

Dev Trend growth

Dev Actual growth

HIY Trend growth

HIY Actual growth

Source: World Bank data.

Import and export growth by region

0

20

40

60

80

100

120

140

HIY DEV SSA ECA SAS LAC EAP

Imports

Exports

annualized growth rates (saar)**

Source: World Bank data.**Note: All data for Jan-2010, except SSA which ends in Nov-2009

G20 countries: trade-restrictive and

liberalizing measures**

-50 -40 -30 -20 -10 0 10

United States

Turkey

South Korea

South Africa

Saudi Arabia

Russia

Mexico

Indonesia

India

Japan

EU

China

Canada

Brazil

Australia

Argentina

Liberalizations Restrictions

Source: WTO/UNCTAD/OECD. **Note: Oct-08 to Feb-10

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March 18, 2010

page 8 External Environment for Developing Countries

Commodity Prices

Oil demand rising. Global oil demand turned

positive in Q4-09 after falling for five consecutive

quarters. OECD demand remains negative, having

declined for more-than four years. But the falloff has

moderated, with Q1-10 demand expected to drop

only 0.8mb/d or 1.6% (y/y) before turning marginally

positive in Q2-10. Recent U.S. data show that de-

mand is now in positive territory, with the latest 4-

week tally up 3.8% (y/y). But much of the growth has

been in non-transport fuels. Among non-OECD coun-

tries, demand growth has been concentrated in

China, with Q4-09 up a resounding 17% (y/y). More

than half of growth was for petrochemical feedstock,

the result of new capacity. Thus growth in Chinese oil

demand related to petrochemicals should moderate

in future.

Oil prices up on views of tighter markets.

Crude oil prices (World Bank average) have now

traded between $70-80/bbl for more than five

months. Prices have trended near the upper end of

the range in March, briefly exceeding $80/bbl, as oil

market fundamentals continued to tighten slowly on

falling stocks and rising demand. Crude oil stocks

have fallen from peaks of a year ago, though they

remain high in the United States and Europe. Prod-

uct stocks have also dropped from their highs, but a

global surplus in distillates persists due to the severe

slump in commercial transport. OPEC met March

17th and left output quotas unchanged, stating cur-

rent prices are acceptable and demand is starting to

pick up.

Oil futures rise. Oil futures prices (U.S. WTI on

NYMEX) have moved higher in step with the gains in

spot prices over the past year, with contract prices

for December 2018 near $95/bbl. A year ago oil fu-

tures prices were in steep contango (future prices

above current prices) reflecting the plunge in demand

and burgeoning surplus. The curve has flattened as

the market moves towards balance, and is due in

part to significant volumes of oil that OPEC removed

from the market. The forward curve remains in mild

contango as the market remains in surplus, but the

flattening and recent strength reflects investor expec-

tations of a tighter market. Near-by prices also coin-

cide with OPEC’s desire for a range of $70-80/bbl.

Growth in U.S. oil demand now positive (y/y)(3 month moving average)

-2000

-1500

-1000

-500

0

500

1000

Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

Other

Gasoline

Distillate

Resid

kb/d

Source: U.S. EIA and DECPG.

Oil prices and OECD oil stocks

2400

2500

2600

2700

2800

20

40

60

80

100

120

140

Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

$/bbl million bbl

Oil price [L scale]

OECD stocks [R scale]

Source: U.S. EIA and DECPG.

WTI Futures Prices - NYMEX

30

40

50

60

70

80

90

100

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Mar 16 2010

$/bbl

Monthly contract prices to Dec 2014*

for select dates in 2009-10

Feb 18

Jul 13

Dec 31

Source: NYMEX.

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March 18, 2010

page 9 External Environment for Developing Countries

Agriculture prices fall after string of gains.

Food prices fell 3.6% in February after four straight

monthly gains. All indices declined on generally im-

proved supply conditions, particularly soybeans and

maize in Brazil and Argentina, respectively. Food

prices are up 12% (y/y) led by a 29% increase in the

“other food” category owing to a doubling of sugar

prices—this due to a shortfall in India’s production

and higher import demand. Grains prices are the one

group lower than a year earlier due to abundant har-

vests. Beverage prices also fell in February following

gains in 9 of the previous 10 months. Prices are up

21% (y/y) led by a 35% increase in tea prices due to

drought in Kenya and India. Cocoa and coffee prices

are also higher on production shortfalls.

Metals demand surges in China in 2009.

World metals demand (six LME base metals)

dropped 1.4% in 2009, the first decline since 2001.

But China’s demand surged by 23% to 31 million

tons—represented 41% of global consumption, up

from 13% in 2000. [These figures are apparent de-

mand and include significant stocking in China]. Out-

side China, metals demand fell by more than 13%,

with the bulk in OECD countries—half of which in

Europe, with the largest pace of decline among the

group (26%). During this decade China’s metal con-

sumption increased 17% per year; outside China,

annual demand declined 1.1%: other developing

countries displayed moderate gains, while OECD

witnessed a drop of nearly 4% per year.

Metals prices volatile on demand con-

cerns. Metals prices are up sharply over the last

year, with copper more-than doubling, and zinc, lead

and nickel not far behind. Gains were due to robust

import demand in China—some of which went into

stocks, both government and private—together with

large production cuts during the recession. A revival

in prices has been accompanied by higher LME

stocks, as anticipated restocking outside China has

yet to materialize, though demand is picking up.

Prices have been quite volatile this year, with con-

cerns of slowing Chinese consumption weighing on

prices. Nickel prices have been strongest due to a

recovery in stainless steel production, and strikes at

Vale’s Canadian operations, now in their 8th month.

100

150

200

250

300

350

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

Grains

Fats & Oils

Other Food

Beverages

Food and beverage prices fall in

February(2000=100)

Source: DECPG.

Nickel prices surge on strong stainless

steel production

0

20

40

60

80

100

120

140

160

180

0

10,000

20,000

30,000

40,000

50,000

60,000

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

$/ton „000 tons

Nickel price

LME stocks

Source: LME and DECPG.

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March 18, 2010

page 10 External Environment for Developing Countries

International Finance

Weak February flows tied to bonds. Capital

flows halved to $16 billion in February, due to a falter-

ing in bond issuance. But flows for the first two months

of the year amount to $48 billion, up 48% from $33

billion in the like period of 2009. After a barrage of issu-

ance in January, bond sales faltered to $5 billion as the

market took a seasonal hiatus. Demand in February

was also influenced by Greece’s debt crisis. Though

issuance slowed in the month, the pipeline remains full,

with many sovereigns announcing plans to issue in

coming months. Much supply is expected from Emerg-

ing European sovereigns, including Russia, Poland,

Romania, Ukraine, and Albania. Indeed, issuance has

picked up sharply in the first half of March, with $10

billion placed. Bank lending remains persistently weak,

underscoring that bank recapitalization is a lengthy

process. Equity was stable at $7 billion in February.

EM: comparatively low debt burden? The

spotlight on sovereign risk in southern Europe sug-

gests that the fiscal/debt dynamics in a number of ad-

vanced economies has become troublesome. The

Euro Area’s fiscal deficit more than tripled on average

from 2% of GDP in 2008 to 6.2% at the end of 2009,

with public debt reaching 78% of GDP. Several so-

called peripheral European economies (including

Greece, Ireland, Portugal, and Spain) posted an aver-

age fiscal deficit of 11% of GDP (up from 6.6% in

2008) with a debt/GDP ratio of 77.5%. Many EM sover-

eigns are in better shape than several developed coun-

tries, since they would require relatively small fiscal

adjustments to secure their respective debt burdens.

EM spreads stabile; U.S. yields up. EM bond

spreads eased from this year’s high 341 basis points

(bps) of early-February to their current 271 level.

Spreads remain 70 bps above the average posted dur-

ing the 18-month period ending June 2007; but they

are now below levels seen before the Lehman collapse

of September 2008. While spreads have been steady

since October 2009, U.S. Treasury yields increased 53

bps since end-November. The possibility of G3 policy

tightening over coming months could have a significant

impact on EM bonds. The 2004 experience (last time

the Fed began to hike rates after a protracted easing)

shows that the spike in UST yields triggered a substan-

tial widening of EM spreads.

Bonds slump…carrying February

flows to $16 billion

Source: DECPG.

$ billion

Q1 Total Jan Feb Q1 Total Jan Feb

Total 103 390 24 9 48 353 32 16

Bonds 12 65 9 6 18 115 20 5

Banks 71 257 9 2 22 129 4 5

Equity 20 68 6 1 8 109 7 7

Lat. America 19 90 10 3 21 137 8 4

Bonds 5 20 5 3 10 62 7 1

E. Europe 36 157 4 0 6 72 12 2

Bonds 2 35 2 0 4 33 7 1

Asia 38 98 9 5 18 122 12 7

Bonds 3 7 2 3 5 16 7 2

Others 11 45 1 1 3 22 0.2 3

2009 20102008

Fiscal and debt positions in 2009-14

-12

-10

-8

-6

-4

-2

0

0 20 40 60 80 100 120 140

Public debt %GDP, 2009

Publi

c bala

nce %

GDP,

2009

Source: JPMorgan, Barclays Capital and World Bank.

Greece

Italy

United States

2.0

2.3

2.6

2.9

3.2

3.5

3.8

4.1

4.4

4.7

5.0

5.3

100

200

300

400

500

600

700

800

900

Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

EMBIG spreads [L]

U.S. ten-year note [R]

Source: Bloomberg, JPMorgan and World Bank.

EM spreads on downward path but UST benchmark yield stepping up

EMBIG spreads in basis points [Left] and U.S. Treasury 10yr note [right]

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March 18, 2010

page 11 External Environment for Developing Countries

Currencies

Greek debt amplifies euro movements. The

weakness of the euro eased over the course of

March, with the currency moving from $1.3560 on the

first of the month to $1.3762 by the twelfth, as con-

cerns regarding the Greek debt problem began to

wane in foreign exchange markets. But the Greek

effect, among other factors has cost the euro 4% of

its dollar value since the turn of the year. During this

episode, the yen has traded in a volatile fashion

(coefficient of variation: 0.75), but picked up a net

2.8% against the greenback. Both currency swings

are now being driven by shifts in expectations for

economic growth. With building strength- and better

balance- in domestic demand and trade in the United

States and Japan, and limited-, lone-sided develop-

ments in Europe (see OECD).

Diversity in REERs. In this measure of a cur-

rency index we get a better feel for the competitive-

ness of a country’s exports through both the relative

nominal exchange rate and relative inflation perform-

ance. Developments highlight three points of inter-

est: (i) appreciation in the REERs of commodity cur-

rencies, e.g. Brazilian real and Indonesian rupiah,

stems from substantial nominal gains (tied in part to

international commodity prices) augmented by favor-

able relative inflation performance; (ii) the real euro

exchange rate has indeed appreciated little despite

the jump in euro/dollar cross rate through much of

the last two years. And (iii) the Chinese RMB in real

effective terms has shown a tendency toward depre-

ciation, in large part following the dollar after the re-

linkage of the yuan to the USD two years ago.

Treasuries preferred. U.S. capital account data

for February show that foreign investors continue to

give short shrift to U.S. private sector assets

(especially bonds) in favor of U.S. Treasuries. With

the “flight to quality” almost wholly dissipated, it

would be expected that the higher yields on corpo-

rate paper would be attractive for international buy-

ers. This apparently is not the case. In February, for-

eigners sold a net $25 billion in corporate bonds,

while purchasing a net $62 billion in Treasuries. Over

the course of the last year, this has meant an in-

crease of $223 billion in foreign holdings of Treasur-

ies, and a shift from purchase of $95 billion to $45

billion in sales of U.S. corporate bonds. Stay tuned!

85.00

87.50

90.00

92.50

95.001.350

1.390

1.430

1.470

1.510

1.550

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

Source: Thomson/Datastream.

yen/USD

USD/Euro (inverse)

Euro volatile against dollar in Feb/March yen holds steady during Greek crisis

USD per Euro (inverse) [Left] and Yen per USD [right]

REERs show a range of recent

developments across key countries

80

90

100

110

120

130

140

Argentina

Source: Morgan-Stanley, IMF and World Bank.

real effective exchange rates, index January 2007=100

Brazil

China

Indonesia

Germany

United States

Foreign investors continue to prefer

U.S. government assets

-40

-20

0

20

40

60

80

100

120

Private Securities

Government Securities

Source: U.S. Treasury.

net flows into U.S. Treasuries / GSEs; coporate bonds and equity, $bn, 3mma

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March 18, 2010

page 12 External Environment for Developing Countries

Focus: Southern Euro Zone

Contraction with twin deficits. The economies

of Portugal, Ireland, Italy, Greece, and Spain con-

tracted in 2009 as a consequence of the global crisis,

made worse by idiosyncratic problems such as the

end of the construction boom in Spain and a large

reliance on foreign trade and capital inflows in Ire-

land. Large twin deficits increased the vulnerability of

these countries to the global slowdown, probably with

the exception of Italy where both deficits are signifi-

cantly below those of its peers. The Greek external

deficit has been in double digits since 2006, while

Spain and Portugal have been fluctuating below 10%

of GDP. The rigidity of the Greek economy coupled

with large debt roll-overs is of concern to investors.

Ballooning fiscal deficits. Greece, Ireland, and

Spain have experienced ballooning budget deficits,

reaching double digits in 2009; 4 years ago Spain

and Ireland were recording large surpluses as capital

flowed in. On top of the growing fiscal gaps, gross

national savings are at low levels—particularly in

Greece at some 3-4% of GDP. Portugal and Ireland

show national savings slightly over 10% of GDP,

while only Spain has comparable levels to the larger

EU economies (near 20% of GDP). The case of

Greece is the most challenging, since national sav-

ings are well below the fiscal deficit. It also faces

debt payments of €20bn in March-April 2010 and a

total of €53bn for 2010. Without room to maneuver in

monetary, exchange rate-, and fiscal policies (due to

high debt) the coming adjustment will be painful.

Sovereign risk in Greece. The challenge faced

by the Greek sovereign has led to downgrades: S&P

moved Greece to BBB+, to levels of South Africa and

Thailand, but its CDS spreads are 200bps higher.

Greek banks like Alpha Bank and NBG are showing

CDS spreads more-than 250bps over the mean val-

ues for their credit rating. Concerns over political will

and the feasibility of Greek adjustment plans have

forced the government to adopt ever more stringent

fiscal measures. The last plan, announced March 10,

included substantial spending cuts and tax hikes, and

was welcomed by markets. Any adjustment will likely

lead to a prolonged contraction, higher unemploy-

ment, and social tensions.

Current account balance (% GDP)

-16

-14

-12

-10

-8

-6

-4

-2

0

Portugal Ireland Italy Greece Spain

2007 2008 2009 2010F

Source: World Bank.

-15

-10

-5

0

5

10

15

20

25

Portugal Ireland Italy Greece Spain

Fiscal Balance

Gross National Savings

Fiscal balance and national saving (% GDP)

Source: World Bank, EIU and JPMorgan.

BNP Paribas

SantanderBBVA

Intesa SanpaoloHSBC

Nordea

Credit Agricole

Barclays Deutsche SG

UBS

Caixa Gral

Dexia

Credit SuisseING

Commerzbank

Unicredit

Swedbank

LloydsRBSErste

Bco Espirito SantoRaiffeisen

KBC Groep

Banco Comm. Portuges

AIB

50

100

150

200

250

0 1 2 3 4 5 6 7

bp

s

Long Term Credit Rating - Local currency

Alpha Bank 443

NBG 428Banks of southern Euro

Zone countries in RED

AA AA- A+ A A- BBB+

Source: Bloomberg, Standard and Poor’s

CDS spread by credit ratingas of March 12, 2010 – basis points

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March 18, 2010

page 13 External Environment for Developing Countries

Southern European banks in Euro Zone

with large exposure to Eastern Europe.

Banks in southern Euro Zone have relatively impor-

tant claims on emerging economies, representing

over 25% of GDP in Spain and 19% of GDP in

Greece. Except for Spanish banks, which are almost

entirely exposed to Latin America, and Portuguese

banks (the more diversified of the group, with rela-

tively sizable exposures to LAC, Eastern Europe, and

the Middle East/Africa), the other 3 countries in the

group are mainly exposed to Eastern Europe, the

most troubled region among emerging markets.

Greek banks have total foreign claims of $104bn (or

30% of GDP) to developed and emerging countries,

of which $64.3bn are due in 1-year or less, repre-

senting 18.6% of GDP. Total claims to emerging

countries accounted for almost $67bn of the total.

ECA vulnerable to problems in Greek

banks. Greek banks have a considerable exposure

to Central and Eastern Europe- over $60bn or almost

18% of Greek GDP. Ninety percent of those claims

are concentrated in 4 countries: Turkey, Romania,

Bulgaria, and Serbia. But they also have a large ex-

posure to high-income countries such as the UK,

Cyprus, and the United States. Trouble in the Greek

banking sector, as viewed in high spreads, implies a

vulnerable situation for some of these developing

countries. Claims of Greek banks represent a sizable

share of GDP in economies like Bulgaria (39% of

GDP), Romania (25%), Serbia (21%), or smaller

countries such as Montenegro (98% of GDP) or

Croatia (53%). Should Greek banks reduce activity in

some of these countries, local economies may be

affected.

Banks in Western Europe are also vulner-

able to problems in Greece. The other side of

the coin is that of Western European banks with im-

portant claims on Greece. Swiss banks hold claims

totaling $64bn, or over 13% of Swiss GDP. French

banks, on their side, have claims of $75bn (2.8% of

GDP) and German banks have claims of $43bn

(1.3% of GDP) on Greece. Recent hints of support

from EU nations are encouraging to avert more dam-

age to their banking systems. Even with this support,

Greece may be forced to endure a drastic adjustment

on the path to sustainability.

20.6

19.1

10.5

9.8

9.8

4.94.8

24.5

64.3

0

20

40

60

80

100

120

Total Claims Claims under 1yr

Others

Serbia

US

Cyprus

UK

Bulgaria

Romania

Turkey

18.6% of GDP

Total: $104bn = 30 % of GDP

Foreign claims by Greek banksbillions USD

Source: BIS.

0%

2%

4%

6%

8%

10%

12%

14%

16%

Germany France Switzerland UK Italy

$64bn

$75bn

$43bn

$12bn $8bn

Claims of Western European banks on

Greecepercent of lender’s GDP

Source: BIS.

0% 5% 10% 15% 20% 25% 30%

EE LAC Africa / ME Asia

Claims of southern Euro Zone banks on EMsas percent of Lender’s GDP

Source: BIS.

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March 18, 2010

page 14 External Environment for Developing Countries

Average 2009 2009 20101999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Oct Nov Dec Jan

World 2.8 4.7 0.6 -8.1 -22.0 5.8 12.5 8.8 0.4 0.8 0.9 0.0High - in come cou n tries 1.4 2.6 -1.7 -12.8 -30.9 1.3 12.0 6.5 -0.1 0.8 0.7 1.5

Industrial countries 1.4 2.7 -2.0 -13.0 -31.1 0.2 12.1 6.3 -0.1 0.9 0.5 1.4United States 1.3 1.5 -2.2 -9.7 -19.0 -10.4 6.4 6.6 0.2 0.7 0.5 0.9Japan 1.1 2.9 -3.2 -21.7 -61.6 34.0 32.2 18.8 0.5 2.2 1.7 2.8Euro Area 1.2 3.5 -2.0 -14.7 -31.7 -5.3 12.2 1.3 -0.5 0.3 -0.1 1.9United Kindgom -0.4 0.3 -3.1 -10.2 -18.0 -2.1 -4.0 1.7 0.0 0.5 0.5 -0.5

Other high income 2.1 5.0 1.2 -7.2 -14.7 9.2 12.2 4.2 -0.9 1.1 0.6 ..Hong Kong (China) .. -1.5 -6.6 -8.4 -9.2 -3.7 -7.8 0.6 0.0 0.3 0.5 ..Singapore 6.3 6.2 -4.0 -4.4 -24.8 74.0 19.2 -29.1 0.4 -11.0 19.9 14.0Taiwan (China) 4.7 8.1 -1.4 -8.3 -30.2 93.5 39.9 52.0 2.2 3.7 5.5 0.8

Dev elopin g cou n tries -210.3 9.8 6.0 1.8 -1.8 14.4 13.2 13.1 1.2 0.8 1.3 -2.7East Asia and Pacific 20.8 15.2 11.1 8.9 10.9 24.4 14.8 15.9 1.3 0.9 1.6 -4.1

China 15.2 18.0 12.7 11.2 14.9 26.4 16.6 15.0 1.0 1.0 1.2 -4.6Indonesia 3.4 5.6 3.1 1.4 9.9 0.6 -5.1 14.4 3.7 1.5 1.3 0.6Thailand 8.6 8.2 5.3 -5.2 -29.0 43.9 16.2 42.7 0.8 -0.1 10.7 -5.6Malaysia 5.8 1.2 0.9 -7.7 -17.9 9.2 10.4 11.4 5.3 -3.5 1.2 2.5

Europe and Central Asia 5.1 7.2 1.2 -8.3 -15.5 4.6 10.5 14.9 2.5 0.9 0.5 ..Russian Federation 5.5 6.3 2.3 -10.7 -22.8 -2.2 10.2 8.9 -1.0 3.5 -0.5 ..Turkey 3.7 6.9 -0.8 -9.8 -20.4 16.2 13.8 33.2 14.2 -6.6 5.1 ..Poland 6.3 9.5 2.0 -3.7 -6.2 9.4 6.0 10.4 -0.1 4.2 -3.2 2.5Czech Republic 4.8 10.4 -2.0 -13.2 -20.5 1.3 11.2 4.2 0.2 -0.6 1.7 ..

Latin America and Caribbean 1.5 4.2 0.7 -6.7 -17.2 2.4 10.3 8.3 1.1 0.3 0.2 -0.6Brazil 3.3 5.9 2.9 -7.2 -23.6 17.9 20.3 16.0 2.9 -0.8 -0.2 1.1Mexico .. 1.8 -0.9 -7.0 -19.9 -2.2 7.3 9.9 1.5 0.8 1.0 -0.2Argentina 2.7 7.3 0.7 -5.7 -12.2 17.8 7.3 5.5 -0.9 3.0 0.3 -0.4Colombia 2.7 10.8 -3.1 -5.9 -4.1 -4.1 2.7 4.9 -0.5 0.0 2.7 ..

Middle East and North Africa 1.6 -0.4 1.6 -1.0 -6.1 5.6 4.4 .. 0.4 -0.3 0.4 ..Saudi Arabia 1.0 -4.8 6.2 -10.9 -30.6 1.4 4.8 .. 1.0 -0.5 0.1 ..Iran 1.1 -2.9 3.6 -0.3 -9.0 6.8 -1.5 .. 0.2 0.2 -0.1 ..Egypt .. .. .. .. .. .. .. .. .. .. .. ..Algeria 3.9 1.0 -0.5 -1.9 -10.1 1.0 12.1 .. -0.3 -0.3 0.2 ..

South Asia 6.8 9.1 4.1 5.6 2.1 15.9 20.4 12.4 -0.5 2.3 3.1 0.2India 6.7 9.8 4.4 6.6 4.5 15.8 21.4 12.0 -1.7 3.4 3.2 0.3Pakistan 6.7 5.5 -0.6 -5.0 -20.6 11.8 15.2 14.1 9.7 -7.0 3.0 1.1Bangladesh .. 5.6 8.0 .. .. .. .. .. .. .. .. ..Sri Lanka .. .. .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. 6.3 3.5 -7.1 -16.5 -4.2 11.3 8.0 0.7 0.4 1.4 ..South Africa 2.5 4.6 0.8 -12.3 -22.6 -11.2 11.1 14.4 0.4 1.0 2.9 -0.6Nigeria .. 0.2 1.1 .. .. .. .. .. .. .. .. ..

Memo:OECD 1.5 .. .. .. .. .. .. .. .. .. .. ..Developing excl. China 3.5 5.4 1.9 -4.4 -12.2 6.2 10.6 11.7 1.4 0.6 1.3 -1.1Developing oil exporters 0.8 3.6 1.0 -5.8 -13.0 -0.2 5.7 6.3 0.8 0.9 0.2 ..Dev. non-oil exporters -213.7 13.0 8.3 5.2 3.5 21.1 16.4 15.9 1.4 0.7 1.6 -3.2Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. ..

Table A.1 Global industrial production growth(constant prices; percent; seasonally adjusted annual rates except monthly figures which are in percent change

over previous month a/)

aIn general, series refer to industrial production excluding construction (e.g. manufacturing, mining and

utilitites). Where this is not available the closest proxy is used, often manufacturing output or oil output, if the

country is a major oil producer.

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March 18, 2010

page 15 External Environment for Developing Countries

Weight Average 2009 2009 20101995 1999-08 2007 2008 2009 Q2 Q3 Q4 Oct Nov Dec Jan

Real GDP a

High - in come cou n tries 78.6 2.3 2.6 0.3 .. 0.5 2.6 .. .. .. .. ..Industrial countries 75.4 2.3 2.5 0.3 .. 0.0 2.0 .. .. .. .. ..

United States 11.0 2.6 2.1 0.4 .. -0.7 2.2 5.9 .. .. .. ..Japan 20.6 1.3 2.3 -1.2 .. 2.7 1.3 4.6 .. .. .. ..Euro Area 27.2 2.0 2.7 0.5 .. -0.5 1.7 0.3 .. .. .. ..United Kindgom 6.5 2.6 2.6 0.5 .. -2.7 -0.6 0.4 .. .. .. ..

Other high income 3.2 4.3 6.1 1.8 .. 17.2 24.5 .. .. .. .. ..Hong Kong (China) 0.7 .. 6.4 2.4 .. 7.4 34.0 .. .. .. .. ..Singapore 0.4 5.6 7.8 1.2 .. 21.7 14.2 .. .. .. .. ..Taiwan (China) 1.4 3.8 6.0 0.7 .. 29.2 32.7 .. .. .. .. ..

Real merch an dis e imports b

High - in come cou n tries .. 9.4 2.4 -15.9 1.9 39.7 25.2 -1.1 1.1 3.4 -4.0Industrial countries .. 9.5 2.1 -16.3 -1.0 41.7 25.1 -1.1 0.9 3.3 -5.0

United States 8.2 1.1 -3.7 -16.5 -16.6 22.1 11.7 -4.1 2.2 3.9 -3.6Japan 5.2 -0.1 13.4 -4.3 -6.2 .. .. -7.2 2.2 2.4 -2.9Euro Area .. 13.9 6.4 -15.4 2.5 48.9 26.7 0.3 -0.3 1.7 -5.5United Kindgom 6.3 10.4 -9.9 -26.9 9.3 24.4 36.4 0.2 2.1 5.4 ..

Other high income 5.5 17.1 3.0 -19.3 13.3 48.0 42.7 -0.5 2.4 4.2 2.3Hong Kong (China) 6.6 10.2 2.8 -9.8 39.5 16.8 38.6 2.0 0.4 3.8 4.5Singapore 5.2 6.3 9.7 -12.8 -4.9 22.5 7.1 -4.7 1.3 7.0 -2.6Taiwan (China) 6.2 -1.2 0.2 -19.5 70.2 .. .. 2.6 7.4 5.0 5.3

I mport Prices c

High - in come cou n tries .. 3.0 9.4 -10.0 -8.2 -2.2 12.2 1.9 1.1 1.6 2.4Industrial countries .. 2.5 9.1 -10.4 -9.0 -3.5 11.9 2.0 0.9 1.8 2.8

United States -0.1 4.3 11.4 -11.4 0.3 6.5 33.1 4.3 0.8 5.2 -0.6Japan -1.4 7.5 8.7 -24.8 -12.7 -11.1 33.7 9.3 3.2 1.1 4.8Euro Area .. 1.7 5.0 -10.6 -10.2 -8.3 2.4 0.5 0.3 0.6 4.0United Kindgom -1.1 1.1 13.2 2.9 -4.2 2.8 10.4 1.8 -0.6 0.6 ..

Other high income -1.0 0.9 12.6 -7.0 -16.8 -2.0 3.2 1.2 2.3 0.3 -0.9Hong Kong (China) -1.2 -0.3 3.0 -1.3 -2.5 2.7 2.0 0.0 0.4 0.7 -0.7Singapore -0.3 3.6 10.5 -11.7 8.4 21.9 45.1 3.0 4.6 1.5 0.6Taiwan (China) -1.6 9.0 8.8 -9.5 -3.6 12.3 27.4 2.4 5.3 -3.7 0.9

Real effectiv e ex ch an ge rates d

Euro Area 33.5 1.3 4.1 4.2 -5.0 -8.5 -5.1 0.6 1.2 -0.2 -1.2 -5.2United States 14.4 -1.1 -4.6 -3.7 10.8 18.7 11.7 -4.5 -1.9 -0.4 0.6 1.0Japan 7.4 -1.2 -6.6 9.8 13.7 16.3 18.3 -1.4 -0.3 0.6 -0.5 -0.8United Kindgom 5.4 -2.4 2.1 -12.0 -8.2 -9.9 -6.1 1.4 -1.7 1.9 -0.3 2.4Canada 3.5 -0.6 0.8 -8.3 -7.6 -12.8 -5.1 11.7 2.7 0.4 -0.9 1.0Hong Kong (China) 3.5 -2.7 -4.7 -5.5 6.7 9.8 8.6 1.6 1.3 0.3 -2.3 -0.2Korea, Rep. 2.5 -1.7 -2.0 -15.9 -13.3 -16.7 -14.5 11.1 2.2 0.4 0.8 3.7Singapore 2.3 1.3 6.9 4.6 -9.2 -9.5 -12.2 -10.8 -0.4 -0.4 -5.0 -3.3Taiwan (China) 2.1 -2.3 -1.3 -4.2 -9.3 -11.9 -10.1 -4.1 -0.8 0.1 1.3 1.7Switzerland 1.7 0.0 -4.9 2.2 9.1 8.9 11.5 8.5 1.7 0.0 -0.3 1.4

a/ Real GDP aggregated using 1995 weights.

b/ JP Morgan Trade Weighted Indices (Real, Broad basis). Data are averages of monthly data for the period in

question.

Table A.2 Demand conditions in high-income countries(US dollar values unless otherwise indicated; percent change; seasonally adjusted annual rates except monthly

figures, which are m/m change)

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March 18, 2010

page 16 External Environment for Developing Countries

Average 2009 2009 2010 Latest1999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Dec Jan Feb 16-Mar

Policy RatesUnited States 3.44 5.02 1.93 0.16 0.19 0.18 0.15 0.12 0.12 0.11 0.12 0.11Japan 0.33 0.70 0.70 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.10Euro Area .. 3.84 3.89 1.28 1.99 1.13 1.00 1.00 1.00 1.00 1.00 1.00United Kindgom 4.80 5.51 4.67 0.65 1.09 0.50 0.50 0.50 0.50 0.50 0.50 0.50

Ten year bon dUnited States 4.70 4.63 3.66 2.67 2.67 3.25 3.51 3.42 3.48 3.66 3.70 3.65Japan 1.49 1.67 1.49 1.34 1.28 1.43 1.34 1.31 1.24 1.27 1.33 1.30Euro Area .. 4.20 4.00 3.25 3.12 3.35 3.33 3.22 3.16 3.31 3.19 3.14United Kindgom 4.77 5.01 4.52 3.65 3.48 3.56 3.79 3.77 3.87 4.01 4.05 4.06

Spreads (Bas is poin ts ) b ,c

Dev elopin g cou n tries .. .. .. .. .. .. .. .. .. .. .. ..East Asia and Pacific .. .. .. .. .. .. .. .. .. .. .. ..

China 82 71 166 126 184 134 111 76 61 53 53 98Indonesia .. .. .. .. .. .. .. .. .. .. .. ..Thailand .. .. .. .. .. .. .. .. .. .. .. ..Malaysia 129 87 201 230 352 243 166 160 149 143 143 156

Europe and Central Asia .. .. .. .. .. .. .. .. .. .. .. ..Russian Federation 262 121 328 443 694 453 378 245 229 206 206 222Turkey 404 214 383 367 537 380 306 244 225 214 214 237Poland 99 61 159 222 311 250 185 142 134 146 146 165Czech Republic .. .. .. .. .. .. .. .. .. .. .. ..

Latin America and Caribbean 522 221 438 522 735 573 419 363 358 343 343 365Brazil 551 180 301 306 431 324 254 216 202 205 205 221Mexico 206 126 254 302 436 312 246 212 202 196 196 204Argentina 2920 320 858 1198 1696 1458 922 716 718 710 710 790Colombia 370 161 305 329 489 346 270 213 208 210 210 235

Middle East and North Africa .. 480 586 578 815 621 474 403 381 325 325 331

Saudi Arabia .. .. .. .. .. .. .. .. .. .. .. ..Iran .. .. .. .. .. .. .. .. .. .. .. ..Egypt .. 86 262 134 251 133 97 57 31 28 28 83Algeria .. .. .. .. .. .. .. .. .. .. .. ..

South Asia d .. .. .. .. .. .. .. .. .. .. .. ..India .. .. .. .. .. .. .. .. .. .. .. ..Pakistan .. 283 1040 1186 1943 1340 841 620 659 684 684 688Bangladesh .. .. .. .. .. .. .. .. .. .. .. ..Sri Lanka .. .. .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. .. .. .. .. .. .. .. .. .. .. ..South Africa 172 100 329 301 461 333 223 187 176 175 175 197Nigeria .. .. .. .. .. .. .. .. .. .. .. ..

Gros s in flow s e

Dev elopin g cou n tries .. 149 211 353 48 62 99 144 47 32 16 ..East Asia and Pacific .. 41 49 91 15 19 22 35 12 9 4 ..Europe and Central Asia .. 35 64 72 6 16 21 30 8 12 2 ..Latin America and Carribean .. 45 65 137 21 16 37 63 21 8 4 ..Middle East and North Africa .. 15 11 4 1 0 1 2 1 0 3 ..South Asia .. 3 7 31 3 7 11 10 3 3 3 ..Sub-Saharan Africa .. 10 16 17 1 4 7 4 2 0 0 ..

a/Monthly figures are simple averages of the daily figures, except the last month, which are the values reported on

the mentioned date. Quarterly and Annual figures are simple averages of the monthly figures.

b/Average values for Spreads are for the period 1996-2003.

c/Aggregates as defined by JP Morgan.

Table A.3 Global credit conditions(percent unless otherwise indicated a/)

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March 18, 2010

page 17 External Environment for Developing Countries

Weight Average 2009 2009 20102000 1999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Nov Dec Jan Feb

En ergy 100.00 .. 244.8 342.0 214.3 166.3 204.5 230.3 256.0 261.5 256.5 267.5 259.3Coal, Australia 4.70 15.8 250.4 484.2 273.3 274.0 253.3 271.7 294.4 300.2 312.4 369.5 358.8Crude oil, average 84.60 22.2 251.9 343.6 218.8 156.3 209.7 241.6 267.5 274.7 265.3 273.2 264.8Natural gas , Europe 10.80 18.7 221.7 347.5 225.7 309.5 212.1 179.0 202.3 202.4 207.6 228.1 228.1

Non -en ergy 100.00 .. 224.7 272.0 213.1 189.9 207.8 219.8 235.1 235.3 241.7 248.9 239.9Agricu ltu re 64.80 .. 180.3 229.5 197.7 181.9 197.1 199.5 212.4 213.2 217.3 222.1 215.9

Bev erages 8.40 .. 169.9 210.0 219.9 197.9 207.3 226.4 248.0 245.4 252.6 252.7 242.1Cocoa 3.10 4.4 215.5 284.5 319.0 286.4 284.7 327.2 377.5 373.7 388.0 389.0 363.9Coffee, arabica 3.00 0.3 141.9 160.5 165.2 147.9 166.8 168.1 178.0 174.8 181.6 182.5 181.3Coffee, robusta 0.80 2.4 209.1 254.2 180.1 192.6 181.0 175.3 171.3 167.8 168.7 169.2 163.9

Food 40.00 .. 184.7 247.4 205.0 190.4 209.8 206.4 213.5 215.3 217.4 221.1 213.0Fats an d oils 16.30 .. 209.0 277.3 216.2 191.4 227.9 220.9 224.5 225.6 231.0 230.6 223.1Palm oil 4.90 3.5 251.5 305.7 220.1 186.1 239.5 218.7 235.9 233.7 255.0 256.2 257.2Soybean meal 4.30 9.6 163.0 224.4 215.5 192.7 224.0 227.7 217.7 223.1 212.0 214.1 198.8Soybeans 4.00 8.0 181.3 246.8 206.3 186.0 217.5 214.3 207.4 207.7 212.9 206.3 191.2

Grain s 11.20 .. 189.0 281.7 214.9 221.3 225.3 202.3 210.8 214.3 217.0 214.0 203.9Maize 4.60 8.1 184.9 252.0 186.9 188.5 198.8 170.9 189.6 193.9 185.9 189.0 182.8Rice, Thailand, 5% 3.40 7.9 161.3 321.2 274.2 289.7 272.9 266.3 267.9 268.2 292.0 282.2 264.0Wheat, US, HRW 2.80 10.0 223.7 285.8 196.4 203.0 219.6 183.0 180.0 185.0 180.8 176.3 170.0

0.0Oth er food 12.40 .. 149.0 177.1 181.5 161.3 172.1 191.2 201.4 202.7 199.8 215.2 207.9Bananas, US 1.90 5.6 159.4 199.1 199.8 210.2 202.4 194.9 191.6 196.6 187.2 185.2 169.8Sugar, world 3.90 0.6 123.2 156.5 221.4 160.0 188.0 260.6 277.0 272.2 281.8 197.5 ..

Raw materials 16.50 .. 174.9 195.7 168.7 153.1 161.1 168.9 191.7 191.8 199.4 208.7 209.7Cotton ("A" Index) 1.90 0.9 107.1 120.9 106.2 92.8 101.7 109.0 121.3 121.1 129.9 130.9 135.4Rubber, Singapore 3.70 13.6 339.2 387.6 287.9 218.9 249.4 298.8 384.5 381.0 419.9 463.4 468.7Sawnwood, Malaysia 6.70 6.3 135.6 149.5 135.5 136.8 139.5 129.7 135.8 138.1 133.8 133.3 131.3

Fertilizers 3.60 .. 240.1 566.7 293.0 376.6 300.6 252.1 242.8 242.2 243.5 255.2 260.2Triple superphosphate 0.70 17.7 246.2 638.6 186.9 233.6 179.8 163.1 171.1 165.9 168.5 215.1 217.9

Metals an d min erals 31.60 .. 314.0 325.7 235.6 185.0 219.0 257.6 280.8 279.8 291.4 303.4 286.8Aluminum 8.40 6.6 170.3 166.1 107.5 87.8 95.9 117.0 129.3 125.8 140.7 144.3 132.3Copper 12.10 15.4 392.5 383.6 284.0 189.1 257.1 323.1 366.6 368.1 385.0 407.3 377.6Gold .. 11.5 249.7 312.4 348.7 325.6 330.3 344.1 394.8 403.9 406.7 400.7 392.6Nickel 2.50 16.4 431.0 244.4 169.7 121.2 149.6 204.9 202.9 196.7 197.6 213.5 219.7

Memo:Cru de Oil (US$ ) .. 22.2 71.1 97.0 61.8 44.1 59.2 68.2 75.5 77.6 74.9 77.1 74.8

a/ The World Bank primary commodity price indices are computed from 1987-89 export values in

US dollars for low- and middle-income economies, rebased to 1990.

b/ Energy and gold prices are not included in the index.

Table A.4 Commodity price indices(current US dollar index,index unless otherwise indicated; a/)

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March 18, 2010

page 18 External Environment for Developing Countries

Average 2009 2009 2010

1999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Oct Nov Dec Jan

Ex port v alu es

Dev elopin g cou n tries 11.1 19.7 20.9 -22.9 -54.5 7.7 30.9 59.6 4.0 0.2 10.3 -2.7East Asia and Pacific 18.5 22.0 16.7 -16.3 -50.0 3.2 27.5 76.3 5.8 -0.6 14.5 -3.3

China 22.8 26.3 17.4 -16.3 -54.7 3.1 26.0 72.0 3.4 0.1 16.5 -4.7Indonesia .. 13.2 20.3 -15.3 -49.4 34.2 44.4 139.8 19.7 -3.3 14.5 -3.5Thailand 12.6 18.6 15.8 -14.3 -20.0 -10.1 40.9 58.5 1.8 -0.8 13.1 1.0

Europe and Central Asia 18.9 22.1 29.3 -29.7 -61.1 9.1 48.7 75.6 6.3 1.9 4.4 -0.2Russian Federation 20.3 16.4 33.9 -36.0 -78.1 30.5 53.1 110.6 4.4 9.0 5.8 2.7Turkey 17.2 .. .. .. .. .. .. .. .. .. .. ..Poland 19.7 26.5 21.9 -21.4 -31.8 17.7 43.1 37.8 3.3 0.4 0.2 -4.3

Latin America and Caribbean 8.3 13.2 11.8 -20.2 -45.8 13.7 7.9 66.4 0.5 7.2 8.1 -4.4Brazil 14.5 16.9 22.7 -22.3 -61.7 41.0 -21.7 42.7 0.7 3.9 12.0 -6.8Mexico 9.5 8.7 7.4 -21.2 -42.6 -5.3 25.4 91.2 0.1 10.9 7.7 -6.4Argentina 10.2 20.1 25.7 -20.5 -31.9 38.9 -32.9 37.1 -0.4 10.5 -2.4 9.5

Middle East and North Africa 21.8 16.1 37.1 -45.2 -74.4 17.2 30.0 -81.7 1.9 -8.5 .. ..Saudi Arabia 21.7 6.4 43.5 -48.8 -83.1 13.2 36.0 -80.6 -6.0 -3.1 .. ..Iran .. 18.0 30.2 -46.7 -82.1 31.1 56.8 -86.6 0.8 -9.8 .. ..Egypt 23.3 18.5 56.5 -19.4 -8.3 42.1 34.2 -75.1 2.2 -3.8 .. ..

South Asia 15.8 18.4 24.8 -17.6 -41.0 -2.8 57.9 36.8 4.2 1.2 3.4 0.3India 18.4 22.0 27.1 -17.9 -39.5 -2.5 64.0 32.3 2.9 2.5 2.2 -0.6Pakistan 9.1 2.6 15.4 -12.1 -41.2 4.6 38.3 48.0 11.8 -7.2 3.0 12.6Bangladesh 11.6 8.3 23.2 .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa 16.8 20.1 27.9 -39.4 -65.6 24.0 54.8 -83.7 -4.7 -10.8 .. ..South Africa 11.8 21.0 15.3 -22.4 -41.2 -1.6 31.7 73.6 2.0 1.3 11.1 -2.9Nigeria 21.0 15.5 29.8 -50.1 -88.5 155.2 47.1 -90.8 -20.3 -13.4 .. ..

Ex port prices b,c

Dev elopin g cou n tries .. 5.6 18.4 -15.3 -37.9 -16.0 -6.8 13.5 1.2 1.0 0.3 0.9East Asia and Pacific .. 5.8 9.8 -7.5 -26.5 -4.5 2.0 8.4 1.0 0.4 0.6 0.9

China 0.0 5.7 8.2 -6.4 -24.1 -3.5 1.0 3.5 0.5 0.2 0.1 1.3Indonesia .. 7.9 20.9 -21.0 -43.2 -18.7 8.1 37.5 2.7 -0.1 6.4 -0.7Thailand 5.7 6.6 9.4 0.4 -11.3 8.6 13.1 22.7 2.7 1.8 1.5 0.1

Europe and Central Asia .. 5.5 27.4 -21.3 -47.4 -32.1 -18.6 22.6 1.9 1.7 1.0 2.2Russian Federation .. 3.9 43.4 -28.7 -56.5 -54.0 -37.0 36.0 2.7 3.0 3.3 3.5Turkey 3.8 .. .. .. .. .. .. .. .. .. .. ..Poland -0.9 5.7 11.0 -8.2 -26.7 -6.3 1.4 4.3 0.3 0.9 -1.6 2.4

Latin America and Caribbean 1.0 7.1 18.3 -15.8 -39.0 -10.8 0.7 19.5 1.5 2.1 -0.9 -1.1Brazil 5.4 7.6 23.2 -14.6 -40.1 -7.5 2.9 15.4 1.3 1.1 1.2 -1.3Mexico 5.8 4.6 16.2 -12.9 -37.3 -20.3 -12.7 3.8 0.3 0.7 -0.6 1.2Argentina 5.3 18.0 32.1 -22.3 -34.5 -12.1 -7.0 21.0 2.6 2.4 0.7 1.6

Middle East and North Africa .. 3.6 46.6 -34.6 -60.6 -54.0 -40.9 24.3 1.4 0.0 .. ..

Saudi Arabia 23.8 5.8 54.1 -45.7 -92.8 -15.1 138.4 104.3 16.5 2.2 .. ..Iran .. 1.4 53.5 -33.0 -60.5 -70.6 -53.7 26.5 0.7 4.9 .. ..Egypt .. 4.2 32.5 -22.2 -47.0 -44.9 -20.8 18.7 1.5 1.9 .. ..

South Asia 2.4 5.8 17.8 -9.6 -30.3 -13.3 -1.2 5.9 0.5 1.4 -1.0 2.0

India 4.3 5.9 18.4 -11.7 -34.7 -14.5 0.3 5.3 0.6 1.4 -1.6 1.6Pakistan 0.5 4.1 30.7 3.3 0.1 -18.5 -20.5 10.3 -1.9 4.6 2.7 4.2Bangladesh -6.7 5.5 6.3 .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. 4.8 35.5 -26.0 -54.2 -41.0 -26.2 28.6 1.6 3.7 .. ..

South Africa 6.9 8.4 22.5 -13.0 -26.6 -18.3 6.7 39.0 3.5 0.2 2.9 1.1Nigeria .. 1.2 55.4 -33.9 -61.1 -73.1 -52.6 18.9 -2.3 5.2 .. ..

Table A.5 Developing countries ' merchandise export growth(US dollar values unless otherwise indicated; percent change; seasonally adjusted annual rates except

monthly figures, which are m/m change /a)

/a Merchandise export (F.O.B), customs basis.

/b Implicit export unit values, U.S. Dollar basis.

/c In many cases countries are very late in reporting trade prices. To estimate more timely figures individual

trade prices were updated using the median (mean) regional trade price for developing (developed)

countries whenever 60% or more of reporters by trade weight reported.

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March 18, 2010

page 19 External Environment for Developing Countries

Average 2009 2009 20101999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Oct Nov Dec Jan

I mport v alu esDev elopin g cou n tries 15.8 21.9 25.3 -21.3 -56.5 14.4 34.2 60.0 1.7 3.0 12.2 -5.2

East Asia and Pacific 18.7 18.7 21.1 -15.4 -56.3 63.8 42.7 85.7 3.2 2.9 16.8 -5.9China 23.2 20.7 18.7 -11.8 -53.3 87.6 38.2 87.3 1.9 2.9 20.1 -7.8Indonesia 16.8 22.0 73.1 -24.8 -72.4 17.8 79.4 101.5 13.9 -0.8 15.2 -4.5Thailand 15.5 8.6 27.8 -25.0 -72.1 11.1 71.8 94.7 -2.6 5.6 15.7 1.6

Europe and Central Asia 17.2 30.3 26.4 -32.7 -62.9 -8.3 31.5 44.5 2.1 2.1 3.0 -3.6Russian Federation 17.5 36.4 32.1 -34.7 -72.0 -12.9 20.2 54.4 0.5 4.7 -0.7 -2.4Turkey 16.0 21.9 19.2 -30.5 -50.8 -0.3 49.2 66.0 6.1 1.6 10.9 -3.8Poland 16.1 30.4 26.4 -30.0 -53.9 -0.5 43.1 27.4 2.8 0.2 -2.2 1.2

Latin America and Caribbean 10.1 19.0 22.1 -24.8 -57.7 -15.7 23.6 40.1 -5.1 8.0 11.0 -6.5Brazil 11.6 31.9 43.4 -25.9 -69.4 -12.2 32.3 84.0 -2.1 6.0 13.1 -7.0Mexico 9.4 10.1 9.8 -24.2 -53.9 -14.0 35.7 53.1 -6.0 13.0 10.1 -8.2Argentina 6.2 30.6 28.8 -32.3 -70.8 1.1 13.9 67.8 -1.1 7.1 11.2 -7.7

Middle East and North Africa 14.7 22.9 44.7 -17.9 -40.9 15.6 11.2 -79.7 3.6 -4.2 .. ..Saudi Arabia 14.4 29.2 24.9 -21.0 -53.0 25.2 37.1 -83.3 -2.8 1.1 .. ..Iran 17.1 10.9 55.1 -22.5 -69.2 45.2 37.8 -79.3 1.4 0.0 .. ..Egypt 11.7 31.6 77.7 -15.8 -36.5 -30.6 57.3 -80.1 10.7 -8.2 .. ..

South Asia 19.0 21.4 38.5 -23.0 -59.1 -16.1 48.6 109.7 8.7 6.0 16.1 -2.2India 21.3 24.7 42.3 -23.7 -63.4 -20.6 63.5 129.2 9.6 8.7 16.1 -3.1Pakistan 16.5 9.4 24.8 -22.4 -45.9 63.5 -10.4 36.9 4.3 -3.2 14.6 9.4Bangladesh 12.3 15.4 28.9 -19.3 -0.4 -38.1 11.0 -76.6 2.7 -9.9 .. ..

Sub-Saharan Africa 14.9 21.5 24.0 -24.0 -43.3 -7.6 33.5 -78.8 -0.9 -1.9 .. ..South Africa 13.2 17.8 11.8 -27.2 -33.3 -38.2 43.3 88.9 1.4 5.6 2.6 -9.6Nigeria 21.8 33.5 37.4 -19.4 -54.1 25.9 22.0 -82.6 -4.6 0.7 .. ..

I mport prices b ,c

Dev elopin g cou n tries .. 5.3 14.8 -11.1 -29.6 -14.4 -5.8 10.9 0.3 0.9 2.4 -1.3East Asia and Pacific .. 4.7 16.4 -11.7 -36.4 -15.8 -9.5 16.5 0.8 1.3 3.8 -2.2

China .. 5.7 17.1 -12.9 -40.9 -15.2 -8.8 17.3 0.5 1.5 4.6 -3.3Indonesia .. 4.7 27.9 -19.5 -44.4 -39.0 -21.2 13.0 1.8 0.8 0.2 3.3Thailand 3.9 -4.0 8.7 0.3 4.6 -4.3 -4.5 13.2 0.3 1.4 2.3 2.0

Europe and Central Asia .. 3.9 7.8 -7.6 -19.5 -0.8 1.2 -1.0 1.3 -1.6 0.7 -3.0Russian Federation 1.7 4.7 10.4 -6.9 -25.8 -2.2 4.0 5.5 0.6 0.9 -1.6 1.4Turkey 5.2 11.1 -0.9 -13.6 -18.0 31.2 30.6 14.1 1.6 -2.9 12.5 -22.4Poland -0.2 -1.7 -0.5 8.0 24.3 7.7 -8.7 -30.8 1.5 -6.4 -6.7 6.9

Latin America and Caribbean 4.1 6.3 14.2 -9.1 -21.6 -14.0 -1.6 8.8 0.3 1.3 1.1 -0.4Brazil 5.6 8.3 21.9 -10.4 -21.6 -24.1 0.6 18.0 2.2 0.9 2.1 -1.7Mexico 3.3 5.4 8.4 -3.7 -8.7 -6.7 0.5 9.4 1.7 0.5 1.1 0.4Argentina 1.8 6.6 11.0 -12.2 -24.4 -17.6 -2.9 8.7 0.8 2.5 -0.9 1.5

Middle East and North Africa .. 6.6 18.6 -11.4 -23.8 -17.9 -4.1 3.7 0.4 0.0 .. ..

Saudi Arabia .. 5.6 11.7 -7.1 -25.4 -3.9 2.2 6.3 1.0 0.2 .. ..Iran .. 5.9 20.2 -12.8 -34.6 -20.0 -7.5 5.4 0.7 0.5 .. ..Egypt .. 7.8 17.7 -13.5 -30.1 -9.6 -7.2 14.0 2.1 1.3 .. ..

South Asia 2.3 6.7 29.8 -17.7 -42.1 -31.3 -18.0 17.9 1.3 1.4 1.4 1.3

India 3.3 5.5 30.0 -18.5 -41.6 -39.4 -16.8 21.3 2.3 1.2 0.6 2.9Pakistan 9.6 11.3 48.2 -13.1 -46.8 -12.7 -25.9 6.2 -5.7 3.0 6.7 -11.3Bangladesh -6.2 6.5 17.3 -10.9 -29.2 -8.4 -6.1 9.3 1.1 1.3 .. ..

Sub-Saharan Africa .. 5.8 12.6 -10.7 -21.6 -27.3 -4.0 -6.4 -4.4 -0.4 .. ..

South Africa 5.8 5.6 13.3 -9.4 -32.3 -15.0 -2.5 15.8 1.0 2.4 -1.1 0.2Nigeria .. 4.9 15.9 -10.7 -33.0 -12.9 -5.3 2.8 0.0 0.4 .. ..

Table A.6 Developing countries ' merchandise import growth(US dollar values unless otherwise indicated; percent change; seasonally adjusted annual rates except

monthly figures, which are m/m change /a)

/a Merchandise import (C.I.F.), customs basis.

/b Implicit import unit values, U.S. Dollar basis.

/c In many cases countries are very late in reporting trade prices. To estimate more timely figures individual

trade prices were updated using the median (mean) regional trade price for developing (developed) countries

whenever 60% or more of reporters by trade weight reported.

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page 20 External Environment for Developing Countries

US$ bn. % GDP 2009 2009 2010

2008 2008 2007 2008 2009 Q2 Q3 Q4 Oct Nov Dec Jan

World -168.7 -0.3 -163.3 -285.6 -146.3 -68.2 -98.5 -142.8 45.7 -173.3 -300.8 -262.2

High - in come cou n tries a -418.9 -1.0 -429.0 -440.3 -194.9 -114.0 -124.6 -169.9 -79.3 -188.8 -241.6 -321.1Industrial countries -499.8 -1.2 -614.9 -707.0 -282.5 -216.1 -216.3 -244.8 -173.9 -256.1 -304.4 -396.5

United States -706.1 -5.0 -870.6 -881.0 -546.3 -499.5 -539.1 -595.7 -550.3 -588.7 -648.1 -607.3Japan 183.2 3.7 91.9 21.2 28.4 30.8 51.8 69.1 84.9 55.0 67.2 96.0Euro Area -19.6 -0.2 50.8 -3.4 61.7 75.2 83.8 96.9 100.0 92.2 98.6 -42.2United Kindgom -73.6 -2.8 .. .. .. .. .. .. .. .. .. ..

Other high income 80.9 4.2 255.7 281.7 307.7 313.5 318.0 329.8 323.2 331.7 334.4 313.3Hong Kong (China) 30.5 12.8 -23.5 -26.2 -29.0 -18.8 -37.9 -41.4 -41.4 -38.4 -44.6 -53.5Singapore 26.9 13.9 36.3 18.7 24.0 23.8 23.8 33.6 32.4 35.9 32.4 39.7Taiwan (China) 24.9 6.0 26.6 15.5 28.3 30.1 27.6 17.9 24.3 16.9 12.7 36.1

Dev elopin g cou n tries 293.5 1.8 265.7 154.7 48.7 45.8 26.1 27.1 125.0 15.4 -59.2 58.8East Asia and Pacific 469.7 9.6 333.8 326.0 255.8 230.4 202.7 210.7 253.4 194.4 184.2 228.9

China 426.1 11.5 262.5 295.8 195.8 170.8 157.2 154.6 180.3 150.1 133.3 168.6Indonesia 0.6 0.1 39.5 8.3 19.2 19.6 16.2 25.5 27.0 23.4 26.0 26.4Thailand -0.1 0.0 14.0 -0.6 18.7 20.9 16.2 10.0 17.4 7.9 4.8 3.7Malaysia 38.9 19.7 .. .. .. .. .. .. .. .. .. ..

Europe and Central Asia .. .. -53.7 -45.0 0.8 -12.7 8.4 49.0 44.7 44.6 57.6 85.0Russian Federation 102.4 6.0 131.3 179.7 111.1 95.6 118.1 159.1 137.5 158.4 181.5 197.4Turkey -41.3 -5.7 .. .. .. .. .. .. .. .. .. ..Poland -29.0 -5.6 -25.4 -38.4 -12.1 -10.8 -11.8 -9.6 -11.1 -10.9 -6.9 -15.2Czech Republic -6.6 -3.0 4.4 4.1 8.1 8.1 10.6 10.2 12.1 8.5 10.1 8.8

Latin America and Caribbean -21.6 -0.5 -2.5 -74.0 -20.4 -5.2 -26.4 0.2 9.5 5.2 -14.0 2.7Brazil -28.2 -1.7 40.4 24.7 25.3 40.2 22.3 15.4 16.7 14.6 14.8 14.1Mexico -15.8 -1.6 -10.0 -17.5 -4.7 -4.3 -9.1 4.2 8.9 4.9 -1.1 4.3Argentina 7.6 2.6 11.2 12.7 16.9 21.7 14.9 14.0 14.2 17.0 10.8 20.0Colombia -6.7 -3.0 -2.9 -2.1 -0.1 -0.1 -0.9 1.5 2.5 2.0 0.0 ..

Middle East and North Africa .. .. 60.6 66.7 -48.0 -55.0 -47.4 -35.9 -49.7 -57.9 .. ..Saudi Arabia 132.9 27.3 117.9 186.1 63.5 66.3 71.4 49.9 78.1 71.5 .. ..Iran 0.0 0.0 50.1 53.9 11.7 12.5 16.1 5.3 11.7 4.3 .. ..Egypt -1.3 -0.8 -10.8 -22.7 -20.0 -19.0 -22.3 -14.0 -22.4 -19.4 .. ..Algeria 0.0 0.0 31.9 39.8 4.0 0.6 5.1 5.8 8.1 9.4 .. ..

South Asia .. -94.8 -156.8 -108.3 -91.4 -97.9 -142.0 -114.5 -131.7 -179.6 -170.2India .. .. -69.1 -120.7 -81.3 -63.9 -72.2 -114.0 -88.3 -106.4 -147.4 -138.3Pakistan -15.7 -9.8 -15.4 -20.9 -14.2 -16.0 -13.7 -14.5 -12.8 -13.2 -17.4 -18.4Bangladesh .. .. -4.2 -6.1 .. .. .. .. .. .. .. ..Sri Lanka .. .. -3.6 -5.8 -2.1 -2.0 -2.6 -1.1 -3.2 .. .. ..

Sub-Saharan Africa -29.9 -3.0 22.3 37.7 -22.3 -20.4 -13.3 -19.2 -18.5 -39.2 .. ..South Africa -21.0 -7.5 -9.6 -8.3 -2.2 0.7 -0.6 -2.2 -2.1 -5.2 0.6 5.7Nigeria 20.3 9.3 27.6 32.8 0.0 2.4 5.0 -2.0 0.4 -6.3 .. ..

Memo:OECD .. .. .. .. .. .. .. .. .. .. .. ..Developing excl. China .. .. 3.1 -141.2 -147.2 -125.0 -131.1 -127.5 -55.3 -134.7 -192.5 -109.8Developing oil exporters 191.2 .. 276.3 313.9 125.0 109.1 130.2 196.3 212.9 182.4 193.6 255.2Developing non-oil exporters .. .. -10.6 -159.2 -76.3 -63.3 -104.1 -169.2 -87.9 -166.9 -252.8 -196.4Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. ..

CAB

Table A.7 Merchandise trade balances(Billion US dollars; annual rates)

a/ Seasonally adjusted

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page 21 External Environment for Developing Countries

Weights Average Levelb 2009 2009 2010 Latest

1995 2000-09 2007 2008 2009 Q1 Q2 Q3 Q4 Dec Jan Feb 16-Mar

World 100.0 94.0 5.8 3.5 -6.0 -13.8 -12.4 -6.0 8.2 -1.4 -1.1 -2.4 0.2High - in come cou n tries 78.3 .. 6.1 3.9 -4.9 -13.2 -11.8 -4.3 10.1 -1.6 -1.0 -2.6 -0.1

Industrial countries 70.6 .. 7.0 4.1 -5.2 -14.4 -12.8 -4.5 11.5 -1.9 -1.2 -3.0 -0.2United States (SDR/USD) 15.7 0.7 4.0 3.2 -2.4 -6.5 -6.6 -1.7 5.6 -1.2 -1.0 -1.7 -0.4Japan 7.4 112.0 -1.2 13.9 10.4 12.3 7.4 15.0 7.0 -1.0 -1.3 1.2 0.3Euro Area 29.5 .. 9.1 6.9 -5.0 -13.1 -12.9 -4.7 12.2 -2.3 -2.1 -4.2 -0.4United Kindgom 5.6 0.6 8.7 -8.1 -15.3 -27.7 -21.5 -14.0 4.3 -2.3 -0.3 -3.4 -3.70.0 0.0 0.0 0.0

Other high income 7.7 101.4 0.4 2.6 -2.2 -3.3 -4.0 -2.2 0.7 0.0 0.4 -0.4 0.2Hong Kong (China) 3.7 7.8 -0.4 0.2 0.5 0.5 0.6 0.6 0.0 0.0 -0.1 -0.1 0.1Singapore 2.3 1.6 5.4 6.5 -2.7 -6.8 -7.2 -2.9 6.7 -0.6 0.0 -1.1 0.9Taiwan (China) 2.1 33.0 -0.9 4.1 -4.6 -7.2 -8.1 -4.9 2.1 0.2 1.2 -0.6 0.60.0 0.0 0.0 0.0

Dev elopin g cou n tries 21.7 115.5 4.8 2.3 -9.3 -15.4 -14.0 -10.6 2.8 -0.5 -1.6 -1.6 1.1East Asia and Pacific 7.5 100.4 5.6 4.0 -2.8 -7.0 -5.7 -3.2 4.1 0.0 0.6 -0.5 0.9

China 2.7 7.9 4.8 9.5 1.7 4.8 1.9 0.1 0.1 0.0 0.0 0.0 0.0Indonesia 1.1 9360.6 0.2 -5.8 -6.7 -20.5 -11.8 -7.5 16.9 0.0 1.9 -0.6 1.3Thailand 1.3 38.9 9.7 3.6 -2.9 -8.3 -7.0 -0.3 4.5 0.2 0.5 -0.3 1.4Malaysia 1.4 3.7 6.7 3.0 -5.4 -11.0 -9.5 -5.1 4.8 -0.7 1.0 -1.1 2.00.0 0.0 0.0 0.0

Europe and Central Asia 4.3 94.5 8.2 6.0 -18.5 -24.5 -24.8 -20.3 -3.4 -2.5 -0.5 -2.2 1.1Russian Federation 1.5 28.6 6.3 2.9 -21.7 -28.6 -26.7 -22.5 -7.5 -3.7 0.6 -0.9 1.5Turkey .. 1.3 9.6 0.1 -16.1 -27.4 -19.6 -19.3 3.2 -1.0 2.2 -2.9 -1.1Poland 0.5 3.5 12.1 14.9 -22.8 -30.7 -33.3 -24.9 1.3 -1.9 -0.3 -2.8 2.7Czech Republic 0.5 26.6 11.3 18.9 -10.5 -19.7 -18.9 -10.2 9.7 -3.4 -2.1 -3.5 0.90.0 0.0 0.0 0.0

Latin America and Caribbean 5.5 142.6 3.1 1.2 -10.4 -18.2 -16.5 -13.4 6.0 0.3 -6.6 -2.9 1.8Brazil 1.1 2.3 11.7 6.2 -8.2 -24.9 -20.2 -10.6 30.9 -1.4 -1.5 -3.5 3.6Mexico 1.7 10.8 -0.3 -1.8 -17.6 -24.8 -21.8 -22.3 -0.7 1.8 0.4 -1.0 2.3Argentina 0.4 2.7 -1.3 -1.5 -15.4 -11.1 -16.4 -20.6 -13.2 0.1 0.1 -1.2 -0.2Colombia 0.3 2329.3 13.6 5.6 -9.2 -22.2 -21.0 -5.7 16.8 -2.2 2.1 1.4 2.6

Middle East and North Africa 1.7 163.8 1.9 2.5 -4.7 -5.5 -7.2 -5.4 0.6 -0.6 -0.2 -1.5 -0.1Saudi Arabia 0.8 3.7 -0.1 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Iran 0.4 .. -1.2 -1.6 .. -5.6 -6.9 .. .. .. .. .. ..Egypt 0.3 5.2 1.7 3.7 -2.1 -1.6 -4.3 -3.4 0.9 -0.5 0.7 -0.6 0.1Algeria 0.3 73.4 4.8 7.3 -11.0 -8.0 -12.8 -16.1 -7.1 -0.1 0.4 -1.4 0.2

South Asia 1.2 107.4 5.4 -5.6 -9.6 -18.0 -13.6 -8.7 1.7 -0.2 0.8 -0.6 1.0India 0.8 45.5 9.6 -5.0 -10.1 -20.0 -14.6 -9.5 4.5 -0.1 1.4 -0.8 1.4Pakistan 0.2 62.4 -0.8 -13.7 -13.8 -23.1 -17.9 -10.2 -4.6 -0.7 -0.6 -0.4 0.4Bangladesh 0.1 62.3 0.1 0.4 -0.6 -0.5 -0.7 -0.8 -0.6 -0.1 -0.1 -0.1 0.0Sri Lanka 0.1 99.8 -6.1 2.1 -5.8 -5.3 -7.4 -6.2 -4.1 0.2 -0.1 -0.1 0.30.0 0.0 0.0 0.0

Sub-Saharan Africa 1.5 117.9 0.3 -5.0 -9.9 -21.0 -14.8 -9.9 9.1 0.1 -0.1 -2.1 1.3South Africa 0.6 7.7 -3.9 -14.7 -2.5 -25.4 -8.2 -0.2 32.7 0.3 0.4 -2.9 2.8Nigeria 0.3 124.9 2.3 6.1 -20.7 -19.7 -20.3 -22.9 -19.7 0.9 -0.4 -0.4 0.4

Memo:OECD 73.7 .. 6.9 4.2 -5.9 -15.0 -13.4 -5.5 11.0 -1.8 -1.1 -2.9 -0.1Developing excl. China 19.0 118.7 4.8 1.3 -10.8 -17.9 -16.0 -12.0 3.3 -0.6 -1.9 -1.9 1.3Developing oil exporters 2.8 171.6 0.7 -1.4 -7.6 -13.2 -10.2 -8.5 3.6 0.1 -13.0 -4.1 0.7Developing non-oil exporters 19.0 108.8 5.4 2.9 -9.5 -15.7 -14.5 -10.9 2.7 -0.6 0.0 -1.3 1.2Asian high tech exporters .. .. .. .. .. .. .. .. .. .. ..

Table A.8 Exchange Rates (USD/LCU)(annual percent change except monthly data which is change over previous month a/)

a/ An increase in the USD per LCU implies appreciation of the local currency. The aggregates computed by using trade weights and

rebased to year 2000=100 (bilateral total trade i.e. imports plus exports in 1995 constant USD).

Aggregates are reported when at least 60% (by weight) of countries reported data in that time period.

b/ Average levels are LCU vis-a-vis the USD

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page 22 External Environment for Developing Countries

Average 2009 2009 20101999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Oct Nov Dec Jan

World 4.8 4.8 8.8 2.8 5.5 3.1 1.3 1.5 1.0 1.6 2.0 ..

High - in come cou n tries 3.3 2.4 4.3 1.0 1.9 0.7 0.2 0.9 0.3 0.9 1.3 1.2Industrial countries 3.2 2.3 3.8 0.6 1.6 0.4 0.1 0.7 0.1 0.7 1.1 1.3

United States 3.8 2.8 3.9 -0.3 0.0 -1.2 -1.6 1.5 -0.1 1.9 2.8 2.7Japan 1.4 0.0 1.4 -1.3 -0.1 -1.0 -2.2 -2.0 -2.5 -1.8 -1.6 -1.2Euro Area 3.3 2.1 3.3 0.3 1.0 0.2 -0.4 0.5 -0.1 0.5 1.0 1.1United Kindgom 3.6 2.3 3.6 2.2 3.0 2.1 1.5 2.1 1.6 1.9 2.9 3.5

Other high income 6.1 2.3 4.4 1.6 2.4 1.5 .. .. 0.7 1.4 1.8 2.1Hong Kong (China) 4.3 2.0 4.3 0.5 1.7 -0.1 -0.9 1.4 2.2 0.6 1.3 1.0Singapore 6.5 2.1 6.6 0.6 3.4 0.2 -0.3 -0.7 -0.9 -0.8 -0.5 0.2Taiwan (China) 3.5 1.8 3.5 -0.9 0.0 -0.8 -1.3 -1.3 -1.9 -1.7 -0.2 0.3

Dev elopin g cou n tries 10.4 6.2 10.4 4.0 7.8 4.8 2.5 3.0 2.4 2.7 3.9 ..East Asia and Pacific 9.5 5.5 9.5 2.9 4.4 1.4 0.3 1.8 -0.3 1.3 2.4 ..

China 5.8 3.2 1.1 -6.2 -8.0 -8.6 -6.2 -1.8 -4.3 -1.7 0.7 0.6Indonesia 9.5 5.8 9.5 4.8 8.6 5.6 2.7 2.6 2.6 2.5 2.9 3.8Thailand 5.5 2.2 5.5 -0.8 -0.2 -2.8 -2.2 2.0 0.4 2.0 3.6 4.2Malaysia 5.4 2.0 5.5 0.6 3.8 1.3 -2.3 -0.1 -1.5 0.0 1.1 1.4

Europe and Central Asia 10.4 8.4 10.7 3.7 7.6 4.5 2.9 3.3 3.3 3.3 3.7 ..Russian Federation 14.1 9.0 14.1 11.7 13.8 12.4 11.4 9.2 9.7 9.1 8.9 8.0Turkey 10.4 8.7 10.5 6.3 8.4 5.7 5.3 5.7 5.1 5.6 6.6 8.2Poland 4.3 2.4 4.4 3.8 3.6 4.0 4.0 3.7 3.6 3.7 3.8 3.9Czech Republic 6.3 2.9 6.4 1.0 2.1 1.5 0.2 0.5 -0.1 0.6 1.0 0.7

Latin America and Caribbean 8.8 6.4 8.8 3.4 6.2 4.0 1.9 2.9 2.7 2.6 3.3 ..Brazil 5.7 3.6 5.7 4.9 5.8 5.2 4.4 4.3 4.2 4.3 4.4 4.6Mexico 5.1 3.9 5.1 5.3 6.2 6.0 5.1 4.0 4.5 3.9 3.6 4.5Argentina 8.6 8.8 8.6 6.3 6.6 5.5 5.9 7.1 6.5 7.1 7.7 8.3Colombia 7.0 5.5 7.0 4.2 6.6 4.8 3.2 2.4 2.7 2.4 2.0 2.1

Middle East and North Africa 13.7 3.9 14.9 3.6 4.5 3.3 4.2 4.6 5.0 .. .. ..Saudi Arabia 9.9 4.1 9.9 5.1 6.9 5.3 4.2 4.0 3.5 4.1 4.3 ..Iran 25.5 17.2 25.6 13.5 20.9 15.1 12.1 7.4 7.6 7.3 7.4 ..Egypt 18.3 9.5 18.3 11.8 13.4 10.6 9.9 13.3 13.2 13.3 13.4 13.7Algeria 0.1 3.5 4.4 3.4 5.1 .. .. .. .. .. .. ..

South Asia 10.9 7.6 10.9 9.2 9.5 8.9 9.7 8.3 7.8 10.5 10.6 13.8India 8.4 6.3 8.4 10.9 9.5 8.9 11.7 13.4 11.5 13.4 15.2 16.2Pakistan 20.3 7.6 20.3 13.7 20.3 14.9 10.6 10.0 8.8 10.5 10.6 13.8Bangladesh 8.9 9.1 8.9 4.6 5.7 4.3 4.2 6.6 6.8 .. .. ..Sri Lanka 22.6 15.8 22.6 3.4 7.9 2.4 0.8 3.0 1.4 2.9 4.9 6.7

Sub-Saharan Africa .. 6.9 10.6 5.5 10.2 7.7 2.1 2.7 1.7 2.4 4.5 ..South Africa .. 7.1 11.6 7.1 8.4 7.8 6.4 6.1 6.0 5.9 6.4 ..Nigeria 11.6 5.4 11.6 12.4 14.3 12.5 10.9 12.0 11.7 12.4 11.9 ..

Memo: .. .. ..OECD 3.3 .. .. .. .. .. .. .. .. 2.7 4.1 ..Developing excl. China .. 6.3 10.5 4.2 7.9 4.8 2.6 3.0 2.6 4.3 4.4 ..Developing oil exporters 12.0 5.4 9.9 5.3 11.0 5.8 3.5 4.0 3.6 2.4 3.8 ..Developing non-oil exporters 10.3 6.6 10.5 3.5 7.0 4.1 1.7 2.9 1.4 .. .. ..Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. ..

Table A.9 Global Inflation(annual percent change; seasonally adjusted a/)

a/ The CPI aggregates are the medians of the growth rates.

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page 23 External Environment for Developing Countries

Weights 2009 2009 2010 Latest1995 2007 2008 2009 Q2 Q3 Q4 Dec Jan Feb 16-Mar

World 100.0High - in come cou n tries b 82.8 4.13 2.32 0.44 0.41 0.39 0.39 0.40 0.39 .. ..

Industrial countries 80.6 4.15 2.32 0.44 0.42 0.40 0.39 0.40 0.40 .. ..United States (US Federal funds rate) 25.5 5.02 1.93 0.16 0.18 0.15 0.12 0.12 0.11 0.13 0.16Japan (Discount Rate) 18.4 0.70 0.70 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30Euro Area (Eurosys main refi rate-minimum bid) 24.5 3.84 3.89 1.28 1.13 1.00 1.00 1.00 1.00 1.00 1.00United Kindgom (Clearing bank's base rate) 3.9 5.51 4.67 0.65 0.50 0.50 0.50 0.50 0.50 0.50 0.50

Other high income 2.2 3.37 2.16 0.31 0.30 0.29 0.29 0.29 .. .. ..Hong Kong (Discount rate) 0.5 6.52 3.13 0.50 0.50 0.50 0.50 0.50 0.50 0.50 ..Singapore (MAS Interbank 1 month rate) 0.3 2.68 1.15 0.45 0.44 0.44 0.44 0.44 0.44 0.44 0.44Taiwan (Interbank swap overnight rate) 0.9 1.96 1.93 0.12 0.11 0.10 0.10 0.11 0.11 0.10 0.12

Dev elopin g cou n tries 17.2East Asia and Pacific 4.4 .. .. .. .. .. .. .. .. .. ..

China (Lending rate, 6m to 1y) 2.4 6.71 7.18 5.31 5.31 5.31 5.31 5.31 5.31 5.31 5.31Indonesia (SBI 90 day rate) 0.7 9.18 9.18 9.18 9.18 9.18 9.18 9.18 9.18 .. ..Thailand (14day Repo Rate - BOT) 0.6 .. .. .. .. .. .. .. .. .. ..Malaysia (Interbank overnight rate) 0.3 3.50 3.48 2.11 1.99 1.99 1.99 1.99 1.99 1.99 2.11

Europe and Central Asia 3.0Russian Federation (Discount (Refin.)) 1.2 10.27 10.87 11.38 12.23 10.86 9.45 8.96 8.75 8.74 ..Turkey (Interbank 1 week average) 0.6 18.37 17.05 9.71 10.09 8.46 7.10 6.88 6.89 6.88 6.89Poland (Interbank 2 week) 0.4 4.48 5.88 3.62 3.58 3.32 3.30 3.28 3.26 3.28 3.29Czech Republic (Repo rate 2 weeks) 0.2 2.86 3.49 1.52 1.59 1.35 1.21 1.13 1.00 1.00 1.00

Latin America and Caribbean 5.8Brazil (SELIC Target rate) 2.4 12.05 12.45 10.16 10.37 8.87 8.75 8.75 8.75 8.75 8.75Mexico (CETES 91 day closing) 1.0 7.36 7.88 5.52 5.43 4.63 4.62 4.60 4.61 4.63 4.65Argentina (30 Day deposit) 0.9 8.09 11.43 11.59 11.81 11.69 10.32 9.46 9.40 9.18 9.03Colombia (Fixed Term Deposit) 0.3 7.94 9.68 6.28 6.54 5.08 4.38 4.21 4.01 4.03 3.98

Middle East and North Africa 1.4Saudi Arabia (IMF discount rate) 0.4 4.79 2.89 .. 1.67 0.28 .. 0.29 .. .. ..Iran (IMF discount rate) 0.3 .. .. .. .. .. .. .. .. .. ..Egypt (IMF discount rate) 0.2 9.00 10.17 .. 9.50 8.67 .. .. .. .. ..Algeria (IMF discount rate) 0.1 4.00 4.00 .. 4.00 4.00 .. 4.00 .. .. ..

South Asia 1.6 .. .. ..India (Bank deposit 365+ days) 1.2 7.04 7.90 8.90 9.00 9.00 8.59 8.00 8.00 8.00 8.00Pakistan (Repo 7-15 day) 0.2 9.09 10.63 12.12 12.87 12.03 12.22 12.01 11.93 12.01 12.02Bangladesh (Bank Rate) 0.1 5.00 5.00 .. 5.00 5.00 .. .. .. .. ..Sri Lanka (Central bank repurchase) 0.0 10.43 10.50 9.03 9.55 8.43 7.78 7.50 7.50 7.50 7.50

Sub-Saharan Africa 1.0 .. .. ..South Africa (Repo rate) 0.5 9.61 11.61 8.39 8.50 7.24 7.00 7.00 7.00 7.00 7.00Nigeria (IMF discount rate) 0.1 9.13 9.85 .. 8.00 .. .. .. .. .. ..

Memo:OECD 83.0 .. .. .. .. .. .. .. .. .. ..Developing excl. China 14.8 .. .. .. .. .. .. .. .. .. ..Developing oil exporters 2.0 .. .. .. .. .. .. .. .. .. ..Developing non-oil exporters 15.2 .. .. .. .. .. .. .. .. .. ..Asian high tech exporters .. .. .. .. .. .. .. .. .. .. ..

Table A.10 Global Central Bank Interest Rates(percentage a/)

a/ Monthly figures are simple averages of the daily figures; except for the latest month, the figure reported for the latest month is the

value on the date the data has been reported (which is the last daily observation one day before the note becomes available).

b/ High-income aggregates use 1995 USD GDP weights.

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page 24 External Environment for Developing Countries

Average 2009 2009 2009 2010 Latest1999-08 2007 2008 2009 Q1 Q2 Q3 Q4 Dec Jan Feb 16-Mar

World 91 .. .. .. .. .. .. .. .. .. .. ..High - in come cou n tries .. .. .. .. .. .. .. .. .. .. .. ..

Industrial countries .. .. .. .. .. .. .. .. .. .. .. ..United States 89 .. .. .. .. .. .. .. .. .. .. ..Japan 84 98 79 62 52 56 61 61 62 64 62 64Euro Area 99 .. .. .. .. .. .. .. .. .. .. ..United Kindgom 88 155 100 65 47 56 66 70 68 69 65 66

Other high incomea .. .. .. .. .. .. .. .. .. .. .. ..Hong Kong (China) .. 163 139 121 82 106 126 137 152 153 145 153Singapore 80 18 10 4 3 3 3 4 5 5 5 5Taiwan (China) 72 101 87 74 43 59 67 75 78 82 75 77

Dev elopin g cou n tries a,b 156 246 220 176 106 139 165 188 193 197 184 194East Asia and Pacificc 123 .. .. .. .. .. .. .. .. .. .. ..

China 118 230 202 182 131 170 201 218 195 193 181 189Indonesia 207 414 407 356 145 218 295 339 310 328 311 324Thailand 188 260 245 201 104 134 166 181 164 168 160 171Malaysia 116 177 159 141 98 115 134 149 157 161 155 163

Europe and Central Asia .. .. .. .. .. .. .. .. .. .. .. ..Russian Federation 525 554 490 259 164 247 272 343 343 364 343 359Turkey 87 150 116 93 49 66 91 102 97 106 97 96Poland 168 274 229 132 80 97 124 147 160 163 147 158Czech Republic 354 768 847 577 381 475 576 580 648 662 619 632

Latin America and Caribbean 203 352 361 291 182 238 284 345 367 366 342 365Brazil 199 349 395 317 197 267 318 397 411 407 376 404Mexico 193 350 302 229 151 188 226 257 285 284 271 287Argentina 104 200 175 101 63 70 92 113 121 125 117 120Colombia 352 .. .. .. .. .. .. .. .. .. .. ..

Middle East and North Africa .. 261 231 164 103 134 158 181 181 188 178 188Saudi Arabia .. .. .. .. .. .. .. .. .. .. .. ..Iran .. .. .. .. .. .. .. .. .. .. .. ..Egypt 213 497 556 354 188 255 300 317 293 306 320 314Algeria .. .. .. .. .. .. .. .. .. .. .. ..

South Asia .. .. .. .. .. .. .. .. .. .. ..India 198 334 297 242 120 177 216 248 285 292 272 291Pakistan 241 .. .. .. .. .. .. .. .. .. .. ..Bangladesh .. 241 369 447 425 487 569 597 623 662 699 699Sri Lanka 229 .. .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. .. .. .. .. .. .. .. .. .. .. ..South Africa 216 290 240 218 139 175 210 230 220 223 211 227Nigeria 409 .. .. .. .. .. .. .. .. .. .. ..

Memo: .. .. .. ..OECD .. .. .. .. .. .. .. .. .. .. .. ..Developing excl. China .. .. .. .. .. .. .. .. .. .. .. ..Developing oil exporters .. .. .. .. .. .. .. .. .. .. .. ..Developing non-oil exporters .. .. .. .. .. .. .. .. .. .. .. ..Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. ..

Table A.11 Stock Markets(indices, year 2000=100)

a/ Average for Developing countries and Other High Income countries is for the period 1995-2002

Note: Quarterly and Monthly data is constructed from daily data by taking the last observation for the month.

Annual data is the average over 12 months.

b/ Aggregates defined by IFC/S&P

c/ East Asia Pacific including South Asia

Source: World - Morgan Stanley Capital International Index; USA - Wilshire 5000; Japan - Topix; Euro Area - S&P

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March 18, 2010

page 25 External Environment for Developing Countries

GDP Gross domestic Product Current Account Balance

2009 2010 2011 2010 2011

Cons. EIU OECD Cons. EIU OECD Cons. EIU OECD Cons. EIU OECD

World -2.2 3.2 2.8 1.9 3.3 2.5 2.5 177.3 -370.3 .. 186.6 -351.8 ..High - in come cou n tries -3.3 2.3 1.9 1.9 2.4 1.4 2.4 -180.1 -370.6 .. -160.2 -352.0 ..

Industrial countries -3.4 2.2 1.8 1.9 2.3 1.3 2.4 -267.2 -370.7 .. -250.3 -352.1 ..United States -2.5 3.1 2.5 2.5 3.0 1.4 2.8 -491.3 -478.4 -506.2 -536.6 -449.3 -565.5Japan -5.3 1.5 1.5 1.8 1.5 1.1 2.0 186.4 157.2 145.5 201.6 167.1 147.9Euro Area -3.9 1.1 0.7 0.9 1.5 1.0 1.7 -33.7 -79.2 -10.5 -9.6 -81.3 44.8United Kindgom -4.5 1.4 0.7 1.2 2.2 0.9 2.2 -38.6 -15.5 -56.8 -36.0 -10.1 -48.5

Other high income -2.7 4.6 4.2 .. 4.4 4.2 .. 87.1 .. .. 90.1 .. ..Hong Kong (China) -2.9 4.8 4.7 .. 4.5 3.6 .. 24.1 .. .. 27.1 .. ..Singapore -2.1 5.9 4.9 .. 5.3 4.8 .. 26.7 .. .. 27.6 .. ..Taiwan (China) -3.4 4.9 4.2 .. 4.5 4.6 .. 33.2 .. .. 33.2 .. ..0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Dev elopin g cou n tries 1.7 6.0 5.8 .. 6.1 5.6 .. 357.4 0.3 .. 346.8 0.3 ..East Asia and Pacific 6.9 8.9 8.6 .. 8.4 7.5 .. 362.0 0.3 .. 377.4 0.4 ..

China 8.5 9.8 9.6 .. 9.1 8.1 .. 304.9 0.3 276.4 320.1 0.3 323.9Indonesia 4.5 5.7 5.5 .. 6.0 5.9 .. 7.4 .. .. 7.6 .. ..Thailand -3.0 4.3 3.2 .. 4.5 4.1 .. 11.8 .. .. 8.8 .. ..Malaysia -2.2 4.8 5.4 .. 5.0 4.0 .. 31.8 .. .. 34.6 .. ..0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Europe and Central Asia -5.4 3.1 2.6 .. 4.0 3.7 .. 5.7 .. .. -6.9 0.0 ..Russian Federation -7.9 3.9 3.5 .. 4.6 4.3 .. 68.7 0.1 .. 68.4 0.1 ..Turkey -5.8 4.4 3.4 3.7 4.4 4.3 4.6 -25.7 .. -19.9 -32.5 0.0 -25.8Poland 1.5 2.5 2.5 2.5 3.3 3.0 3.1 -11.1 .. -11.5 -14.1 0.0 -13.2Czech Republic -4.1 1.4 0.9 2.0 2.8 2.8 2.8 -1.7 .. 0.6 -2.9 0.0 0.80.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Latin America and Caribbean -2.5 3.9 3.6 .. 3.7 3.5 .. -39.4 -0.1 .. -65.1 -0.1 ..Brazil -0.1 5.3 5.5 .. 4.6 5.1 .. -46.1 -0.1 .. -59.7 -0.1 ..Mexico -6.9 3.7 3.4 2.7 3.5 2.8 3.9 -10.0 .. 9.4 -15.3 .. 15.0Argentina -2.5 3.7 3.1 .. 2.6 2.6 .. 7.9 .. .. 6.1 .. ..Colombia 0.2 2.7 2.5 .. 3.6 3.4 .. -5.6 .. .. -6.6 .. ..0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Middle East and North Africa .. .. .. .. .. .. .. .. .. .. .. .. ..Saudi Arabia -0.9 3.9 3.3 .. 4.8 3.5 .. 55.8 .. .. 71.1 .. ..Iran .. .. .. .. .. .. .. .. .. .. .. .. ..Egypt 4.6 4.8 5.4 .. 5.6 5.5 .. -3.6 .. .. -2.9 .. ..Algeria .. .. .. .. .. .. .. .. .. .. .. .. ..0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

South Asia 6.1 6.5 7.0 .. 7.4 7.5 .. -27.3 .. .. -28.6 .. ..India 6.6 7.0 7.7 .. 8.0 8.0 .. -21.0 .. .. -23.3 .. ..Pakistan 2.9 3.6 2.9 .. 4.1 4.2 .. -6.3 .. .. -5.3 .. ..Bangladesh 5.5 5.9 5.7 .. 6.3 5.9 .. .. 0.1 .. .. -0.1 ..Sri Lanka 3.2 .. 6.4 .. .. 5.9 .. .. .. .. .. .. ..0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Sub-Saharan Africa .. .. .. .. .. .. .. .. .. .. .. .. ..South Africa -2.0 2.7 2.8 .. 3.8 3.7 .. -16.8 .. .. -19.3 .. ..Nigeria 4.5 6.0 6.2 .. 6.1 5.8 .. 21.1 .. .. 21.0 .. ..0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Memo:OECD -3.5 2.3 1.9 1.9 2.4 1.4 2.5 -321.1 -370.7 .. -322.2 -352.2 ..Developing excl. China -1.1 4.3 4.1 .. 4.7 4.5 .. 52.6 .. .. 26.7 .. ..Developing oil exporters 1.1 3.6 2.6 .. 4.7 3.7 .. 103.1 0.1 .. 118.3 0.1 ..Developing non-oil exporters 1.7 6.2 6.1 .. 6.2 5.8 .. 254.3 0.2 .. 228.5 0.2 ..Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. .. ..

Table A.12 GDP and current account forecasts(annual percent change; billions of US dollars)

Sources: Consensus Economics Ltd.; The Economist Intelligence Unit and OECD.

Regional Aggregates:

Latin America and Carribean: ARG,BOL,BRA,CHL,COL,CRI,DOM,ECU,MEX,PAN,PER,PRY,URY,VEN

Europe and Central Asia: BGR,CZE,EST,HRV,HUN,KAZ,POL,ROM,RUS,SVK,TUR,UKR

East Asia and Pacific: CHN, IDN,MYS,PHL,THA

Middle-East and North Africa: DZA,EGY,IRN,IRQ,JOR,LBN,MAR,OMN,SAU,SYR,TUN,YEM

South Asia: BGD,IND,PAK

Sub-Saharan Africa: AGO,BWA,CIV,CMR,GAB,GHA,KEN,MUS,MWI,NAM,NGA,SDN,TZA,UGA,ZAF,ZMB,ZWE