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                       DECPG Daily
         Economics and Financial Market Commentary
                     October 11, 2011
                Allen Dennis, Eung Ju Kim, Cristina Savescu, Nadia Spivak
  You’ll find recent issues of this Daily and lots of other current analysis and high-frequency data at our
              intranet website: http://gem or for external users http://www.worldbank.org/gem.

Consumer confidence in Japan rises to highest level in six months. Consumer
confidence in Japan rose slightly in September according to a release from the Cabinet
Office. After plummeting to 33.1 in April in the aftermath of the Tohoku earthquake,
Japan’s consumer confidence index rose to 38.6 in September, the highest level
recorded in six months. All four sub-components of the index: general livelihoods,
income growth, employment conditions and plans to buy new durable goods, rose in
September. However, the index still remains below its pre-quake level of 41.2 [see
Chart at http://gem or http://www.worldbank.org/gem]. Readings below 50 imply that
the number of pessimists outnumber the optimists. Further the business sentiment
report released by the Cabinet Office last month, showed business sentiment among
major Japanese companies over the July to September period to have risen for the first
time in four quarters. However, with heightened uncertainty in the global economy, and
a strong yen continuing to hurt Japan’ export dependent economy, both consumer and
business confidence will continue to face headwinds in the coming months.

Among Emerging Markets…In Latin America, Brazil’s retail sales fell 0.4% in August
relative to the previous month, the largest drop since March 2010, adding to evidence
that the economy is slowing.
In South Asia, Pakistan’s exports surged 18.68% in the first three months of the current
fiscal year, while imports jumped 23.12% causing the trade deficit to widen by 28.78%,
according to the Federal Bureau of Statistics.
In Europe and Central Asia, Romania’s unemployment rate inched up to 4.89% in
September, from 4.87% the previous month, while consumer price inflation decelerated
to 3.45% year-on-year down from 4.25% in August. Turkey’s current account deficit
narrowed to $4 billion in August, down from $5.32 billion in July, but it was up 31%
relative to a year-ago period. For the year as a whole the current account deficit is
projected to widen to 9% of GDP, as the economy rebounds from recession.
In East Asia and Pacific, Indonesia’s central bank unexpectedly cut its key interest rate
by 25 basis points to 6.5%, the first cut in more than two years, as global recovery slows
and inflation eases. Malaysia’s industrial output rose 3% year-on-year in August, after
contracting by a revised 0.5% in July.
In the Middle East and North Africa, Egypt’s urban consumer price inflation eased to
8.2% in the twelve months to September, from 8.5% in August. Jordan’s consumer price
inflation was 4.8% in September.

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The Daily Brief is a summary of economic news items for Bank staff whose responsibilities require that
they stay abreast of changes in global markets. The views expressed here are those of the various
authors and do not necessarily reflect those of the World Bank Group's Executive Directors or the
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