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U.S. consumer spending rises in August


Financial Markets

Developing-country stocks fell to a 3-week low amid signs of economic deceleration in China. Major
currencies in emerging markets weakened as well against the dollar. The benchmark MSCI Emerging
Markets stock index slid 0.7 percent on Monday, extending this quarter’s declines to 19 percent.
 Malaysia’s ringgit weakened 0.9 percent to a 17-year low, while Chile’s peso and South Africa’s rand slid
0.6 percent and 0.9 percent, respectively. Zambia’s currency, kwacha, depreciated 11 percent to 12
versus the dollar, the lowest since at least 1994, after Moody’s Investor Service cut the country’s
sovereign credit rating.

Saudi Arabia has withdrawn up to $70 billion from global asset managers as OPEC’s biggest oil producer
seeks to plug its growing budget deficit created by volatile markets, low oil prices, and military campaign
in Yemen. The Saudi Arabia Monetary Agency’s foreign-exchange reserves have dropped about 10
percent from a peak of $737 billion in August 2014, to $661 billion in July, according central bank data.



High Income Economies

Personal consumption expenditures in the U.S. rose by 0.4 percent in August (m/m), ahead of
expectations. Personal consumption accounts for more than two-thirds of the U.S. economy, and is
holding up despite headwinds from recent economic developments. Personal income (pre-tax earnings
from salaries and investments) rose 0.3 percent in August (m/m), and the personal savings rate dipped to
4.6 percent in August from 4.7 percent in July.

Business and consumer confidence in Italy rose sharply in September, reaching 4-year and 15-year
highs, respectively. Both are well ahead of expectations. The government of Prime Minister Matteo
Renzi expects growth and inflation to pick-up, and debt to fall for the first time since 2007.



Developing Economies

East Asia and Pacific

Thailand's exports declined 6.7 percent (y/y) in August, more than expected and steeper than the 3.6
percent drop in July. Imports declined 4.8 percent, less than the 12.7 percent decline in July.
 Correspondingly, the trade surplus declined to $721 million from $770 million in July.


Latin America and the Caribbean

Mexican trade deficit increased to US$ 2.8 billion in August from US$ 1.2 billion deficit a year earlier and
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way above market expectations, as exports declined at a faster pace than imports. Exports shrank 6.8
percent (y/y) while imports fell 1.9 percent.


Sub-Saharan Africa

Fitch Ratings cut Angola's credit rating to B+ from BB- with a stable outlook, saying the nation's heavy
reliance on revenues from oil exports left it exposed to sharp price decreases. However, Angola's foreign
minister downplayed the downgrade saying that authorities had taken the right steps to shield the oil-
dependent economy from falling crude prices.

Kenyans will soon be able to buy local government bonds from their mobile phones, a move that will
deepen access to financial services in east Africa’s biggest economy while also giving Treasury a
cheaper source of funding.

September 28, 2015



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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