Outlook for developing country growth improved considerably in the last six months Outlook for developing country growth improved considerably in the last.

Outlook for developing country growth Outlook for developing country growth improved considerably in the last six improved considerably in the last six

monthsmonths

Momentum of global trade and production Momentum of global trade and production strong; financial and commodity markets strong; financial and commodity markets

variedvaried

Developing country recovery unlikely to Developing country recovery unlikely to eclipse pre-crisis trends; prospects differ eclipse pre-crisis trends; prospects differ

markedly across developing regionsmarkedly across developing regions

Global risks are more balanced (some up-Global risks are more balanced (some up-side), but oil price a current concernside), but oil price a current concern

Key Messages

GDP Growth: Industrial and Developing Regions, 1995-2002

(percent)

1

2

3

4

5

1995 1996 1997 1998 1999 2000 2001 2002

Source: World Bank baseline, March 2000.

World

OECD

Developing Countries

Forecast

GDP Growth: G-7 and Developing Countries(percent year-over-year)

Source: DECPG baseline (March 2000) and GEP (November 1999)

G-7 countries

2.42.1

4.24.5

3.12.6

4.6 4.8

2000 2001 2000 2001

November forecast Current forecast

Developing countries

Per capita growth distribution by developing country population

(percentage of developing country population excluding China, India)

Source: DECPG baseline, March 2000

0

20

40

60

80

1996 1998-99 2000

< 0% 0-2% > 2%

1.6 billion people

140 million people

Convergence of industrial country growth rates in the early 2000s

(percent)

-3

-2

-1

0

1

2

3

4

5

1997 1998 1999 2000 2001 2002

Source: DECPG projections, March 2000. Notes: * North America: United States and Canada; ** Asia-Pacific: Japan, Australia and New Zealand.

North America*

Euro Area

Asia-Pacific**

U.S. consumer, producer and import prices, 1997-2000

(3-month/3-month annualized change in percent )

-15

-10

-5

0

5

10

15

Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00

Source: U.S Bureau of Labor Statistics.

Producer prices

CPI

U.S. import prices

U.S. and Euro-Area short term interest rates, 1997-2000

( percent )

3

3.5

4

4.5

5

5.5

6

6.5

Jan-97 Jul-97 Jan-98 Jul-98 Jan-99 Jul-99 Jan-00

Source: Datastream / Euro-stat..

U.S. 3-month CD rate

Euro-area average3 month money market

Fed Funds

High-income countries’ import volume growth (percent, 3 month/3 month, saar)

-20

-10

0

10

20

30

Q1 97 Q3 97 Q1 98 Q3 98 Q1 99 Q3 99

Per

cen

t

Source: Datastream and DECPG staff estimates.

Asian NIEs

OECD

Oil and non-oil prices, 1992-2000(US$/bbl for oil, index 1990=100 for others

$10

$13

$16

$19

$22

$25

$28

Jan'92 Jan'93 Jan'94 Jan'95 Jan'96 Jan'97 Jan'98 Jan'99 Jan'00

60

70

80

90

100

110

120

130

140Oil (lhs)Non-oil commodities

Metals & minerals

Source: DECPG, World Bank

Gross capital market flows as a ratio of GDP and spreads on EMBI

0

200

400

600

800

1000

1200

1400

90 91 92 93 94 95 96 97 98 99 2000 20010

1

2

3

4

5

Source: Euromoney, IMF, DECPG staff estimates

Capital Market Flows/GDP

EMBI

Basis points percent

GDP Growth: East Asia, Latin America and the Transition Economies, 1995-2002

(percent)

-5

0

5

10

1995 1996 1997 1998 1999 2000 2001 2002

Source: World Bank baseline, March 2000.

Transition Economies

East Asia

Latin America

Forecast

GDP Growth: South Asia, MENA and Sub-Saharan Africa, 1995-2002

(percent)

0

2

4

6

8

1995 1996 1997 1998 1999 2000 2001 2002

Source: World Bank baseline, March 2000.

MENA

South Asia

Sub-Saharan Africa

Forecast

... to a ‘soft landing’ in the United States... to a ‘soft landing’ in the United States

... from fiscal stimulus to private-... from fiscal stimulus to private-demand led growth in Japandemand led growth in Japan

... to healthier financial and corporate ... to healthier financial and corporate sectors in East Asiasectors in East Asia

... to a medium-term equilibrium price of ... to a medium-term equilibrium price of oiloil

Global Risks: Four Transitions

High Oil price Scenario: GDP Growth for World Regions

(difference (-) in growth rates from baseline)

Source: DECPG. Simulation of $30/bbl in 2000, $25/bbl in 2001 (Oxford Economics) model.Results validated against simulations prepared by OECD, JP Morgan and other analysts.

0 1 2

G-7

World

EAP

LAC

LMIC

ECA

SSA

SAS

MNA

2000 2001