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Eurozone inflation remains low in December


Financial Markets

China’s stocks and currency stabilized to some extent on Tuesday amid government intervention. The
blue-chip CSI 300 Index gained 0.3 percent at the closing as state-controlled funds purchased local
stocks to prop up valuations and Chinese government signaled a selling ban on major stock holders will
remain beyond this week’s expiration date (January 8th). But the broader Shanghai Composite Index
closed down 0.3 percent, while the Shenzhen Composite fell 1.9 percent. The onshore yuan gained 0.2
percent against the dollar to 6.5219, following a 0.6 percent drop on Monday.

U.S. Treasury yields inched higher as demand for safe-have government debt declined amid stabilizing
riskier markets and higher opening for U.S. equities. After falling for the third straight session on Monday,
the yield on the 10-year Treasury note rose 2 basis points to 2.26 percent.


Advanced Markets

Preliminary estimates of Euro Area inflation indicate a rise in consumer prices of 0.2 percent (y/y) in
December, the same as in November and below expectations. Price increases were led by food and
services, while energy prices fell at a slower pace. Core inflation was unchanged at 0.9 percent (y/y) in
December.

The German unemployment rate remained at 4.5 percent in November, close to its lowest level since
1981. The number of unemployed was steady at 1.9 million, while the employed rose slightly to 40.2
million.

The current account surplus in South Korea widened to $9.4 billion in November, compared with $9.1
billion in October. Narrowing deficits on services and secondary income more than offset a fall in the
surplus on goods.


Emerging and Developing Economies

East Asia and Pacific

Philippines’ inflation rate rose 1.5 percent (y/y) in December 2015 from 1.1 percent in November and
slightly above market consensus. It is the highest figure since May, as cost of housing and utilities
declined less than in November, while prices of food & non-alcoholic beverages held steady.

Latin America and the Caribbean

Brazil recorded a $6.2 billion trade surplus in December 2015, up from a $0.3 billion surplus a year earlier
as imports slumped 38.7 percent (y/y), the largest decline since March 2009. Meanwhile, exports
declined 4.1 percent.


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Sub-Saharan Africa

Following a series of wheat tenders in recent months, Ethiopia has issued an international tender to
purchase 70,000 tons of milling wheat. Failed rains during the past spring and summer have sparked
food and water shortages in the economy that depends heavily on farming.




January 5, 2016



The Global Daily is an informal briefing on global economic and financial developments compiled by the
World Bank’s Development Economics Prospects Group. Recent issues, together with analysis of a
variety of macroeconomic topics, covered by the Group, may be found at:
 http://www.worldbank.org/prospects.

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