For more information, visit http://www.worldbank.org/prospects November 17, 2017 Taking Stock U.S. core inflation edged up in October; industrial production expanded strongly. The U.S. core consumer prices— which excludes food and energy prices—rose 1.8 percent (y/y) in October, after recording a 1.7 percent increase in each of the five preceding months (Figure 1). Headline consumer prices rose 2.0 percent (y/y) in October, down from September’s 2.2 percent increase, reflecting a decline in gasoline prices. Separately, U.S. industrial production rose 0.9 percent (m/m, sa) in October, compared with a 0.4 percent increase in September, reflecting a strong post-hurricane recovery in manufacturing production. Euro Area GDP growth edged down in Q3; inflation decelerated in October. The flash estimate of Euro Area GDP growth in Q3 came in at 0.6 percent (q/q, sa), below the 0.7 percent increase recorded in Q2 (Figure 2). Industrial production growth slowed in September, with production of capital and consumer durable goods falling. Meanwhile, Euro Area headline consumer price inflation was confirmed at 1.4 percent (y/y) in October, down from 1.5 percent in September. Core inflation— which excludes energy, food, alcohol, and tobacco—also slowed from 1.1 percent (y/y) in September to 0.9 percent in October, partly due to a decline in the cost of services. Japan’s GDP growth decelerated in Q3. The preliminary estimate of Japan’s GDP growth for Q3 came in at 0.3 percent (q/q, sa), marking the seventh consecutive quarter of expansion—the longest since 2001. Growth in Q3 slowed from a 0.6 percent expansion in Q2, as a weakening in domestic demand was partially offset by an acceleration in export growth. China’s industrial production, fixed-asset investment, and retail sales growth slowed in October. China’s industrial production rose 6.2 percent (y/y) in October, following a 6.6 percent increase in September, as manufacturing output growth slowed. Fixed-asset investment expanded by 7.3 percent (y/y) in October, below September’s 7.5 percent increase, due to softer property investment. Retail sales growth eased to 10.0 percent (y/y) in October, from 10.3 percent in the previous month, on account of a slowdown in the sales of automobiles, household supplies, and construction materials. Rating agencies declared Venezuela in default on its international bonds. Standard & Poor’s lowered Venezuela’s credit rating to selective default, after the country failed to make $200 million in interest payments on its international bonds. Meanwhile, Russia agreed to restructure $3.15 billion of sovereign debt, which could help Venezuela meet its obligations to other creditors. Figure 1 U.S. core prices rose 1.8 percent in October. Figure 2 Euro area GDP growth edged down in Q3. U.S. consumer price inflation Real GDP growth Percent Percent, q-o-q, sa Headline Inflation 3 Core inflation 1.0 0.8 2 0.6 0.4 1 0.2 0.0 0 -0.2 -0.4 -1 -0.6 Jan-15 Jan-16 Jan-17 Apr-15 Jul-15 Oct-15 Apr-16 Jul-16 Oct-16 Apr-17 Jul-17 Oct-17 3Q-10 1Q-11 3Q-11 1Q-12 3Q-12 1Q-13 3Q-13 1Q-14 3Q-14 1Q-15 3Q-15 1Q-16 3Q-16 1Q-17 3Q-17 Source: Bureau of Labor Statistics. Sources: ECB, Haver Analytics. Produced by DECPG. Number 368 | November 17, 2017 Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: Friday, 10 November - Thursday, 16 November 2017 Upcoming releases: Friday, 17 November - Thursday, 23 November 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous Italy 11/14/17 GDP Q3 1.8 % 1.65 % 1.5 % Canada 11/17/17 CPI OCT 1.6 % Germany 11/14/17 GDP Q3 2.3 % 2.4 % 2.1 % Thailand 11/19/17 GDP Q3 3.7 % Czech Republic 11/14/17 GDP Q3 5.0 % 4.8 % 4.7% Malaysia 11/21/17 CPI OCT 4.3 % Poland 11/14/17 GDP Q3 4.7 % 3.9 % Germany 11/23/17 GDP Q3 2.1 % Eurozone 11/14/17 GDP Q3 2.5 % 2.5 % 2.3 % UK 11/23/17 GDP Q3 1.5 % Philippines 11/14/17 GDP Q3 6.9 % 6.3 % 6.7% Singapore 11/23/17 GDP Q3 2.9 % Activity and Inflation (Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized) 2016 2017 2016 2017 2015 2016 Q4 Q1 Q2 Q3 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 1 Industrial Production, sa World 1.9 2.2 5.5 3.8 5.3 2.9 2.2 3.3 3.7 3.1 3.4 4.1 4.0 4.6 4.3 4.3 4.3 4.4 Advanced Economies 0.2 0.2 4.0 1.6 4.4 1.9 0.2 2.0 2.6 1.1 2.2 2.3 2.5 3.2 3.0 3.0 3.0 2.9 Emerging Market and Developing Economies 3.5 4.1 7.0 6.1 6.1 3.9 4.1 4.6 4.9 5.2 4.7 5.9 5.6 6.1 5.7 5.7 5.7 6.0 Commodity-exporting EMDE 0.2 1.3 4.8 3.2 5.3 2.9 1.3 2.3 3.3 3.0 2.3 3.2 4.1 5.5 2.7 3.8 4.4 3.8 Other EMDE 5.0 5.3 8.0 6.8 6.4 4.1 5.2 5.6 5.6 6.1 5.6 6.7 6.1 6.3 6.6 6.4 6.0 6.6 East Asia and Pacific 5.8 5.8 6.1 7.2 6.4 4.6 5.6 5.9 6.0 6.1 6.1 7.3 6.2 6.3 6.5 6.0 5.8 6.4 East Asia excl. China 3.5 4.5 3.2 4.6 1.7 7.8 2.5 4.3 6.1 4.5 4.8 5.5 4.3 5.3 0.5 3.3 4.4 5.3 Europe and Central Asia 1.5 2.0 8.9 5.6 8.1 2.5 1.6 2.8 2.7 4.4 1.5 4.4 4.4 6.5 4.9 6.6 6.2 6.0 Latin America and Caribbean -3.1 -2.7 -0.5 1.2 0.7 2.0 -2.8 -0.5 1.1 0.1 0.4 -0.6 -0.2 1.0 0.0 0.5 1.6 0.5 Middle East and North Africa 2.8 - - - - - 6.5 - - - - - - - - - - - South Asia 3.5 5.2 6.8 5.0 3.0 4.2 4.4 5.2 2.8 4.2 1.9 5.4 4.6 4.2 0.7 4.0 4.5 5.7 Sub-Saharan Africa 0.0 0.8 -1.2 -4.3 3.7 4.0 -1.0 0.9 -1.0 0.3 -2.7 -2.2 -0.5 -1.9 -2.5 -0.2 1.7 -0.1 Inflation, sa 2 World 1.4 1.3 1.6 2.4 2.1 2.2 1.4 1.6 1.8 2.3 2.4 2.6 2.3 2.1 1.9 2.0 2.1 2.1 Advanced Economies 0.1 0.3 0.8 1.6 1.4 1.5 0.7 0.7 1.1 1.5 1.8 1.6 1.9 1.5 1.2 1.4 1.5 1.5 Emerging Market and Developing Economies 2.5 2.3 2.5 3.4 3.3 3.1 2.4 2.4 2.6 2.9 3.3 3.5 3.5 3.3 3.0 2.9 3.3 3.4 Commodity-exporting EMDE 3.7 3.5 3.2 3.4 3.4 3.4 2.9 2.9 3.1 3.3 3.4 3.5 3.7 3.6 3.3 3.3 3.4 3.4 Other EMDE 1.0 1.1 1.7 3.1 3.1 3.0 1.6 1.6 1.8 2.6 3.3 3.5 3.2 3.1 2.5 2.5 3.0 3.4 East Asia and Pacific 1.2 1.7 2.3 2.7 2.9 2.6 2.1 2.2 2.4 2.7 3.2 3.4 3.2 3.1 2.5 2.5 3.2 3.4 Europe and Central Asia 1.9 0.4 1.0 2.4 2.3 2.7 0.9 0.9 1.6 2.3 2.5 2.7 2.6 2.3 2.2 2.4 2.6 2.8 Latin America and Caribbean 2.7 2.4 3.2 3.4 3.1 3.1 3.0 3.2 3.2 3.1 3.3 3.2 3.5 3.0 2.7 2.7 3.2 3.6 Middle East and North Africa 1.9 2.2 2.0 2.5 1.8 1.4 1.9 2.0 1.8 2.2 2.5 2.9 2.0 2.0 1.5 1.3 1.5 1.7 South Asia 4.5 4.9 3.9 4.3 4.5 3.4 4.2 3.7 3.7 3.7 4.2 4.9 4.8 5.0 3.9 2.9 3.4 3.9 Sub-Saharan Africa 3.6 5.3 5.5 6.5 6.5 5.5 5.8 5.4 6.6 6.7 6.7 6.5 6.7 6.5 6.4 5.5 5.3 5.5 1 Industrial production is total production (may exclude construction). When data are unavailable, "industral production, manufacturing" and "industrial production, manufacturing, non-durable manufacturing, petroleum and coal products, crude petrolem products" are used as proxies 2 Median inflation rate for each grouping. Trade and Finance (Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period) 2016 2017 2016 2017 2015 2016 Q4 Q1 Q2 Q3 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Exports, Nominal, US$, sa World -11.6 -3.0 8.2 20.1 3.1 12.4 -3.2 5.0 4.0 11.0 7.7 13.0 3.9 11.3 7.8 10.3 10.7 11.4 Advanced Economies -11.4 -0.8 5.2 19.7 1.3 17.5 -1.6 6.2 5.6 10.2 8.1 10.7 1.3 10.3 6.6 10.0 10.5 11.4 Emerging Market and Developing Economies -11.9 -6.6 14.2 21.0 6.6 3.5 -5.7 3.0 1.6 12.5 6.8 17.3 8.9 13.0 10.0 10.9 11.0 11.3 Commodity-exporting EMDE -24.2 -9.2 26.6 45.7 -10.9 14.3 -5.4 7.7 7.8 26.6 19.7 24.4 13.8 20.5 11.3 17.4 17.4 16.5 Other EMDE -3.7 -4.6 9.8 12.6 14.1 0.0 -5.2 1.8 -0.4 7.6 2.3 14.7 7.1 10.3 9.5 8.6 8.8 9.5 East Asia and Pacific -3.5 -6.1 10.8 13.3 16.0 -1.4 -5.9 1.8 -2.2 8.8 2.2 15.6 8.9 11.3 9.3 10.4 8.2 9.8 Europe and Central Asia -20.7 -6.1 19.8 35.0 -4.4 16.9 -3.6 6.5 7.6 22.4 12.4 20.8 5.6 19.2 10.8 11.2 19.7 16.7 Latin America and Caribbean -11.9 -2.4 13.2 29.4 -3.8 6.5 -4.3 10.0 10.9 14.9 12.5 17.3 9.6 11.5 12.2 10.3 11.3 10.4 Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - South Asia -3.8 0.6 18.9 12.3 -11.3 3.6 2.4 1.5 1.5 2.9 -0.1 11.3 6.6 -1.8 -3.2 11.5 -3.3 8.8 Sub-Saharan Africa -26.9 -14.8 29.3 46.1 -15.0 - -9.4 0.9 3.4 22.6 25.8 19.7 8.6 14.0 13.0 - - - Imports, Nominal, US$, sa World -6.9 -5.2 24.6 21.1 15.7 -2.7 -9.6 3.6 -1.6 11.5 5.4 10.4 -6.2 25.4 7.2 21.3 16.1 5.5 Advanced Economies -12.7 -3.3 2.9 21.0 2.5 14.0 -4.9 2.7 1.5 9.7 3.4 9.3 1.9 10.3 5.1 10.8 9.3 9.3 Emerging Market and Developing Economies -3.3 -6.3 39.9 21.3 23.9 -10.7 -12.1 4.2 -3.3 12.6 6.6 11.0 -10.4 34.7 8.5 27.8 20.4 3.5 Commodity-exporting EMDE -0.9 -7.1 46.0 16.4 33.2 - -15.1 3.9 -5.4 11.9 2.2 8.8 -15.3 39.7 7.3 31.6 22.5 - Other EMDE -11.5 -3.1 21.5 39.3 -2.9 8.6 0.0 5.3 4.3 14.9 22.9 18.8 11.1 17.5 12.7 15.5 14.0 17.3 East Asia and Pacific -13.1 -3.6 22.8 49.3 -11.0 11.2 -0.4 6.0 5.7 17.0 33.7 20.5 12.5 17.9 13.5 15.7 13.9 18.7 Europe and Central Asia -20.7 -1.2 11.3 42.7 12.4 17.2 1.0 6.0 8.5 20.8 10.0 14.3 7.7 22.8 13.4 26.0 16.0 19.3 Latin America and Caribbean -9.9 -7.4 5.4 25.9 -9.0 8.4 -8.2 1.8 3.8 11.2 5.3 13.5 -1.1 12.5 6.2 7.3 9.0 4.8 Middle East and North Africa 1.4 - - - - - - - - - - - - - - - - - South Asia -13.2 -5.4 58.3 33.3 13.1 -16.3 9.1 12.0 2.8 14.8 21.5 40.5 42.0 31.1 13.5 19.1 19.6 17.9 Sub-Saharan Africa -7.6 -13.9 -8.3 - - - -18.0 -9.1 -12.1 - - - - - - - - - 1 International Reserves, US$ World -5.9 -1.8 -2.7 1.9 2.2 1.7 -0.8 -1.4 -0.5 0.8 0.3 0.7 0.8 0.9 0.5 0.9 0.6 0.4 Advanced Economies 2.1 3.4 -1.1 3.7 3.0 1.4 -0.3 -0.8 0.0 1.6 0.4 1.6 1.3 1.2 0.5 0.9 0.5 0.2 Emerging Market and Developing Economies -10.0 -4.9 -3.7 0.7 1.6 1.9 -1.1 -1.8 -0.9 0.2 0.3 0.1 0.4 0.7 0.5 0.8 0.7 0.5 Commodity-exporting EMDE - - - - - - - - - - - - - - - - - - Other EMDE -10.4 -6.1 -4.4 0.6 2.0 2.2 -1.2 -2.1 -1.2 0.1 0.3 0.2 0.6 0.9 0.5 0.9 0.7 0.5 East Asia and Pacific -12.5 -7.7 -4.7 0.4 1.6 2.1 -1.3 -2.3 -1.2 -0.1 0.4 0.1 0.8 0.8 0.1 0.9 0.6 0.6 Europe and Central Asia -5.8 3.6 -4.4 2.9 3.1 2.9 -0.9 -1.8 -1.7 1.9 0.7 0.3 -0.1 1.3 1.9 1.0 1.6 0.3 Latin America and Caribbean -5.6 3.0 0.5 2.5 0.9 1.7 0.6 -0.5 0.4 1.6 0.9 0.0 0.5 -0.2 0.6 0.6 0.7 0.4 Middle East and North Africa - - - - - - - - - - - - - - - - - - South Asia 10.7 3.6 -3.1 2.1 4.8 3.1 -1.2 -1.6 -0.3 0.6 0.5 1.0 0.8 2.0 1.9 1.5 1.3 0.3 Sub-Saharan Africa - - - - - - - - - - - - - - - - - - 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. Produced by DECPG. Number 368 | November 17, 2017 Financial Markets 1 2016 2017 2016 2017 MRV 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.45 0.70 0.95 1.15 0.41 0.55 0.66 0.66 0.79 0.91 0.90 1.04 1.15 1.15 1.16 1.16 1.16 ECB repo 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 US$ LIBOR 3-months 0.32 0.74 0.92 1.07 1.20 1.32 0.91 0.98 1.03 1.04 1.13 1.16 1.19 1.26 1.31 1.31 1.32 1.36 1.42 EURIBOR 3-months -0.02 -0.26 -0.31 -0.33 -0.33 -0.33 -0.31 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 US 10-yr Treasury yield 2.12 1.84 2.12 2.44 2.25 2.24 2.12 2.50 2.44 2.42 2.47 2.29 2.29 2.18 2.32 2.21 2.19 2.35 2.36 German Bund, 10 yr 0.54 0.14 0.18 0.35 0.30 0.46 0.22 0.30 0.34 0.32 0.39 0.25 0.36 0.28 0.55 0.42 0.41 0.42 0.38 Spreads (basis points) JP Morgan Emerging Markets 415 410 369 340 325 322 380 370 354 338 329 331 320 325 327 325 314 306 328 Asia 224 221 197 175 169 161 201 198 185 173 166 173 167 166 163 163 157 148 158 Europe 348 302 283 261 242 234 294 282 272 258 253 250 237 240 243 234 224 226 249 Latin America & Caribbean 540 537 475 445 427 428 491 481 463 442 431 431 420 430 435 435 416 407 430 Middle East 456 517 467 396 362 383 475 438 416 396 377 350 353 382 382 382 384 381 443 Africa 415 518 436 389 386 380 444 422 401 387 380 400 376 383 394 378 367 360 375 Stock Indices (end of period) Global (MSCI) 399 424 424 449 465 487 413 424 433 445 449 455 464 465 478 478 487 497 496 Advanced Economies ($ Index) 1663 1761 1761 1854 1916 2001 1712 1761 1792 1839 1854 1878 1912 1916 1961 1960 2001 2037 2032 United States (S&P 500) 2044 2258 2258 2363 2423 2519 2199 2258 2279 2364 2363 2384 2421 2423 2470 2472 2519 2575 2579 Europe (S&P Euro 350) 1474 1475 1475 1547 1534 1571 1388 1475 1463 1501 1547 1564 1576 1534 1526 1512 1571 1600 1555 Japan (Nikkei 225) 18817 19302 19302 18909 20033 20356 18604 19302 19035 19342 18909 19197 19836 20033 19974 19720 20356 22198 22176 Emerging Market and Developing Economies (MSCI) 794 861 861 958 1011 1082 863 861 909 936 958 978 1005 1011 1066 1088 1082 1119 1118 EM Asia 404 419 419 474 512 543 426 419 443 459 474 484 505 512 538 544 543 571 575 EM Europe 244 295 295 301 304 331 273 295 302 296 301 313 308 304 315 336 331 330 331 EM Europe & Middle East 211 248 248 252 251 268 230 248 253 249 252 259 255 251 261 274 268 268 267 EM Latin America & Caribbean 1830 2341 2341 2611 2544 2917 2330 2341 2516 2600 2611 2601 2532 2544 2752 2873 2917 2809 2690 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.93 0.94 0.91 0.85 0.93 0.95 0.94 0.94 0.94 0.93 0.91 0.89 0.87 0.85 0.84 0.85 0.85 Japan 121.00 108.80 109.63 113.63 111.10 110.96 108.90 116.28 115.03 112.96 112.91 110.02 112.36 110.91 112.31 109.78 110.80 112.93 113.21 Emerging and Developing Economies Brazil 3.33 3.49 3.28 3.14 3.21 3.16 3.33 3.35 3.20 3.10 3.13 3.14 3.20 3.30 3.20 3.15 3.13 3.19 3.32 China 6.29 6.65 6.84 6.89 6.86 6.67 6.85 6.92 6.89 6.87 6.90 6.89 6.88 6.81 6.77 6.67 6.57 6.62 6.63 Egypt 7.70 10.12 14.71 17.82 18.10 17.77 16.34 18.56 18.68 17.01 17.76 18.09 18.10 18.11 17.92 17.75 17.65 17.64 17.64 India 64.14 67.19 67.39 66.97 64.48 64.29 67.60 67.86 68.06 67.01 65.83 64.52 64.46 64.45 64.44 63.97 64.46 65.07 65.42 Russia 61.34 67.06 62.95 58.67 57.17 58.93 64.25 62.03 59.76 58.42 57.83 56.53 56.88 58.10 59.72 59.42 57.66 57.76 60.29 South Africa 12.77 14.71 13.92 13.24 13.21 13.19 13.96 13.88 13.60 13.17 12.95 13.46 13.25 12.91 13.15 13.25 13.17 13.71 14.41 Memo: U.S. nominal effective rate (index) 114.7 119.7 122.5 123.4 120.7 116.6 122.9 124.9 124.8 123.0 122.5 121.6 121.0 119.4 117.9 116.4 115.4 117.4 118.1 1 MRV = Most Recent Value. Commodity Prices 1 2016 2017 2016 2017 MRV 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 2 Energy 65 55 64 68 64 65 59 68 69 69 65 67 64 60 62 65 69 71 71 2 Non-energy 82 80 83 86 82 84 83 84 85 87 85 83 83 82 83 84 86 86 86 2 Agriculture 89 89 90 91 88 87 90 89 91 91 89 88 89 87 88 86 88 87 87 2 Metals and minerals 68 64 71 78 74 81 73 75 76 79 79 75 73 72 76 83 84 84 84 Memo items: Crude oil, average ($/bbl) 51 43 49 53 50 50 45 53 54 54 51 52 50 46 48 50 53 55 60 Gold ($/toz) 1161 1249 1221 1219 1258 1278 1238 1157 1192 1234 1231 1267 1246 1260 1237 1283 1314 1280 1280 Baltic Dry Index 711 676 994 938 1023 1138 1080 1031 913 760 1142 1229 979 861 906 1144 1363 1484 1464 Source: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg 1 MRV = Most Recent Value. 2 Indexes, 2010 = 100. Produced by DECPG. Number 368 | November 17, 2017