For more information, visit http://www.worldbank.org/prospects October 20, 2017 Taking Stock U.S. industrial production rebounded in September; jobless claims fell to a 44-year low. U.S. industrial production rose 0.3 percent (m/m, sa) in September, after a 0.7 percent decline in August, as the effects of Hurricane Harvey and Irma began to fade (Figure 1). Output in manufacturing, mining, and utilities expanded, following contractions in August. Meanwhile, U.S. initial jobless claims decreased by 22,000 to 222,000 in the week ended October 14, the lowest level since March 1973, pointing to a rebound in job growth after the decline in nonfarm payrolls in September. The less-volatile 4-week moving average of claims dropped 9,500 to 248,500. Euro Area trade surplus narrowed in August; headline inflation held steady in September. The Euro Area trade surplus narrowed from €23.2 billion in July to €16.1 billion in August. Export growth picked up to 6.8 percent (y/y) in August, while import rose 8.6 percent (y/y). Separately, the final reading of Euro Area consumer price inflation for September was confirmed at 1.5 percent (y/y), the same as in August. Core inflation—which excludes energy, food, alcohol, and tobacco—was 1.1 percent, slightly down from 1.2 percent in August. Japan industrial production rebounded in August; trade surplus expanded strongly in September. Japan’s industrial production rose 2.0 percent (m/m) in August, above market expectations, after contracting 0.8 percent in July. Exports expanded 14.1 percent (y/y) in September, on robust shipments of automobiles and electronic parts, following August’s 18.1 percent rise. Import growth moderated from 15.2 percent (y/y) in August to 12 percent in September. As a result, Japan’s trade surplus rose to ¥670.2 billion in September, up from ¥486.6 billion a year earlier. China’s Q3 GDP growth was in line with expectations, consumer price inflation slowed in September. China’s GDP rose 6.8 percent (y/y) in the third quarter of 2017, in line with expectations but slightly below Q2’s 6.9 percent expansion (Figure 2), as fixed asset investment growth slowed. Meanwhile, China’s consumer price index rose 1.6 percent (y/y) in September, below August’s 1.8 percent increase, owing to a decline in food prices. In contrast, the producer price index increased 6.9 percent (y/y) in September, up from 6.3 percent in August, pointing to rising factory gate prices. Bond issuance in the MENA region continued to rise. Corporate borrowers and governments in the Middle East and North Africa (MENA) region raised $90 billion in the international bond market during the first ten months of the year, including about $25 billion over the last four weeks alone. The key driver of the debt build-up in the region has been sovereign bond issuances by Saudi Arabia, United Arab Emirates, Kuwait, Oman, and Egypt. Figure 1 U.S. industrial production rose 0.3 percent in Figure 2 China’s GDP growth edged down in Q3. September. U.S. industrial production growth Real GDP growth. Percent, month-on-month Percent, year-on-year 1.2 14 0.8 12 0.4 10 0.0 8 -0.4 -0.8 6 2008Q3 2010Q1 2011Q3 2013Q1 2014Q3 2016Q1 2017Q3 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Source: Federal Reserve Board, Haver Analytics. Sources: China National Bureau of Statistics. Produced by DECPG. Number 364 | October 20, 2017 Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: Friday, 13 October - Thursday, 19 October 2017 Upcoming releases: Friday, 20 October - Thursday, 26 October 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous China 10/15/17 CPI SEP 1.6% 1.6% 1.8% Malaysia 10/20/17 CPI SEP 3.7% New Zealand 10/16/17 CPI Q3 1.9% 1.7% 1.7% Canada 10/20/17 CPI SEP 0.1% Austria 10/17/17 CPI SEP 2.4% 2.2% 2.1% Singapore 10/23/17 CPI SEP 0.4% UK 10/17/17 CPI SEP 3.0% 3.0% 2.9% Australia 10/24/17 CPI Q3 1.9% Euro Area 10/17/17 CPI SEP 1.5% 1.5% 1.5% UK 10/25/17 GDP Q3 1.5% South Africa 10/18/17 CPI SEP 5.1% 4.7% 4.8% South Korea 10/25/17 GDP Q3 2.7% 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 Q3 Q4 Q1 Q2 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 1 Industrial Production, sa World 1.8 2.1 2.8 5.5 3.8 5.3 2.0 2.2 3.3 3.7 3.1 3.4 4.1 4.1 4.6 4.3 4.3 4.2 Advanced Economies 0.2 0.2 1.6 3.9 1.6 4.4 0.3 0.2 2.0 2.5 1.1 2.2 2.3 2.5 3.2 3.0 2.9 3.0 Emerging Market and Developing Economies 3.5 4.1 3.9 7.0 6.1 6.2 3.8 4.1 4.6 4.9 5.2 4.7 5.9 5.6 6.1 5.7 5.7 5.5 Commodity-exporting EMDE 0.2 1.2 3.0 4.9 3.1 5.5 1.1 1.3 2.3 3.3 2.9 2.3 3.2 4.1 5.4 2.9 3.7 3.7 Other EMDE 5.0 5.3 4.1 8.0 6.8 6.4 4.9 5.2 5.6 5.6 6.1 5.6 6.7 6.1 6.3 6.6 6.3 6.0 East Asia and Pacific 5.8 5.8 5.6 6.2 7.3 6.4 5.5 5.6 5.9 6.0 6.1 6.1 7.3 6.2 6.3 6.5 5.9 5.6 East Asia excl. China 3.5 4.5 3.4 3.4 4.6 1.7 2.2 2.5 4.3 6.1 4.5 4.8 5.5 4.2 5.1 0.6 3.0 3.1 Europe and Central Asia 1.5 2.0 -1.1 8.9 5.6 8.0 0.8 1.6 2.8 2.7 4.4 1.5 4.4 4.4 6.5 4.9 6.6 6.2 Latin America and Caribbean -3.1 -2.9 0.2 -0.6 0.8 1.2 -1.8 -2.8 -0.8 1.0 0.1 0.5 -0.7 0.0 1.1 0.1 0.3 1.1 Middle East and North Africa 2.8 - 8.7 - - - 4.3 6.5 - - - - - - - - - - South Asia 3.5 5.2 -2.1 6.7 5.2 3.1 3.9 4.4 5.2 2.8 4.2 1.9 5.4 4.6 4.2 0.8 3.9 4.6 Sub-Saharan Africa 0.1 0.8 -4.3 -1.4 -4.2 3.7 -0.3 -1.0 0.9 -1.1 0.4 -2.6 -2.3 -0.5 -1.9 -2.4 - - Inflation, sa 2 World 1.4 1.3 1.3 1.6 2.4 2.1 1.4 1.5 1.6 1.8 2.3 2.4 2.6 2.3 2.1 1.9 2.0 2.1 Advanced Economies 0.1 0.3 0.4 0.8 1.6 1.4 0.5 0.6 0.7 1.1 1.5 1.8 1.6 1.9 1.5 1.2 1.4 1.5 Emerging Market and Developing Economies 2.5 2.3 2.8 2.5 3.4 3.3 2.9 2.4 2.4 2.6 2.9 3.3 3.5 3.5 3.3 3.0 2.9 3.3 Commodity-exporting EMDE 3.7 3.5 3.2 3.2 3.4 3.4 3.1 2.9 2.9 3.0 3.3 3.4 3.5 3.7 3.6 3.3 3.3 3.6 Other EMDE 1.0 1.1 1.7 1.7 3.1 3.1 1.6 1.6 1.6 1.8 2.6 3.3 3.5 3.2 3.1 2.5 2.5 2.9 East Asia and Pacific 1.2 1.7 2.1 2.3 2.7 2.9 2.2 2.1 2.2 2.5 2.7 3.2 3.4 3.2 3.2 2.5 2.5 3.2 Europe and Central Asia 1.9 0.4 0.5 1.0 2.4 2.3 0.5 0.9 0.9 1.6 2.3 2.5 2.7 2.6 2.3 2.2 2.4 2.6 Latin America and Caribbean 2.7 2.4 3.0 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 Middle East and North Africa 1.9 2.2 2.3 2.0 2.5 1.8 2.5 1.9 2.0 1.8 2.2 2.5 2.9 2.0 2.0 1.5 1.3 2.0 South Asia 4.5 4.9 5.3 3.9 4.3 4.5 5.0 4.2 3.7 3.7 3.7 4.2 5.0 4.8 5.0 3.9 2.9 3.4 Sub-Saharan Africa 3.6 5.3 5.7 5.5 6.5 6.6 5.8 5.8 5.4 6.5 6.7 6.7 6.5 6.7 6.5 6.4 5.5 5.3 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 Q3 Q4 Q1 Q2 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Exports, Nominal, US$, sa World -11.6 -3.0 0.4 8.0 20.5 2.7 -0.8 -3.2 5.0 4.0 11.0 7.7 13.0 3.9 11.3 7.7 10.0 9.6 Advanced Economies -11.4 -0.8 -0.4 4.9 20.0 0.7 1.4 -1.6 6.2 5.6 10.2 8.1 10.8 1.3 10.3 6.5 9.4 9.0 Emerging Market and Developing Economies -12.0 -6.5 1.9 14.0 21.3 6.5 -4.4 -5.6 3.0 1.6 12.6 6.9 17.4 9.0 13.1 10.1 11.0 10.7 Commodity-exporting EMDE -24.2 -9.2 7.3 26.2 46.2 -11.3 -1.6 -5.5 7.7 7.8 26.5 19.7 24.5 13.8 20.4 11.2 17.4 - Other EMDE -3.8 -4.6 0.1 9.8 12.9 14.1 -5.0 -5.0 1.8 -0.5 7.7 2.3 14.8 7.2 10.4 9.6 8.8 8.4 East Asia and Pacific -3.5 -6.1 -0.2 10.7 13.9 16.0 -7.0 -5.9 1.8 -2.1 8.9 2.3 15.7 9.0 11.4 9.4 10.7 8.1 Europe and Central Asia -20.7 -6.1 2.1 18.8 36.1 -5.4 -1.1 -3.6 6.5 7.6 22.4 12.4 20.8 5.6 19.2 10.8 11.3 19.3 Latin America and Caribbean -11.9 -2.4 8.4 12.8 29.0 -3.6 2.9 -4.4 10.0 10.9 14.8 12.5 17.3 9.5 11.4 12.2 10.3 11.2 Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - South Asia -4.8 1.6 -17.4 31.1 5.8 -10.5 -3.0 10.6 3.3 0.2 2.9 -0.1 11.2 6.6 -1.7 -2.8 10.3 -1.2 Sub-Saharan Africa -26.9 -14.8 -3.0 29.5 47.1 -15.1 -2.6 -9.5 0.9 3.4 22.6 25.8 19.9 8.6 14.0 13.1 - - Imports, Nominal, US$, sa World -6.9 -5.2 -21.4 24.5 21.3 15.5 -5.6 -9.6 3.6 -1.6 11.5 5.4 10.4 -6.2 25.3 7.2 21.3 16.0 Advanced Economies -12.7 -3.3 -2.0 2.7 21.5 2.4 -1.6 -4.9 2.7 1.5 9.7 3.4 9.3 2.0 10.3 5.1 10.9 8.8 Emerging Market and Developing Economies -3.3 -6.3 -31.2 39.8 21.3 23.7 -7.8 -12.2 4.2 -3.3 12.6 6.6 11.0 -10.4 34.6 8.4 27.8 20.7 Commodity-exporting EMDE -0.9 -7.1 -38.6 46.1 16.3 33.1 -9.9 -15.1 3.9 -5.4 11.9 2.2 8.8 -15.4 39.7 7.3 31.6 - Other EMDE -11.5 -3.1 2.2 20.7 39.6 -3.3 0.0 -0.2 5.3 4.3 14.9 22.9 18.8 11.0 17.4 12.4 15.3 14.9 East Asia and Pacific -13.1 -3.6 5.9 22.2 49.9 -10.8 0.1 -0.6 6.0 5.7 17.0 33.7 20.5 12.6 17.9 13.5 15.7 13.9 Europe and Central Asia -20.7 -1.2 -2.9 10.9 41.8 12.1 2.3 1.2 5.9 8.5 20.7 10.0 14.2 7.6 22.6 13.1 25.2 17.3 Latin America and Caribbean -9.9 -7.4 4.7 4.6 26.2 -9.4 -3.3 -8.3 1.7 3.9 11.2 5.3 13.6 -1.1 12.4 6.2 7.4 8.6 Middle East and North Africa 1.4 - - - - - - - - - - - - - - - - - South Asia -13.2 -5.3 12.6 58.6 32.8 9.9 0.2 9.5 12.0 2.7 14.8 21.5 40.5 41.6 30.1 11.6 19.4 20.4 Sub-Saharan Africa -7.6 -13.9 -11.6 -8.7 - - -12.5 -18.0 -9.1 -12.0 - - - - - - - - 1 International Reserves, US$ World -5.9 -1.2 0.4 -3.4 1.7 2.2 0.2 -1.1 -1.7 -0.6 0.7 0.3 0.7 0.8 0.9 0.5 0.8 0.5 Advanced Economies 0.6 4.4 1.4 -2.5 3.4 2.9 0.9 -0.7 -1.5 -0.2 1.5 0.4 1.5 1.2 1.2 0.5 0.8 0.4 Emerging Market and Developing Economies -10.0 -4.9 -0.3 -4.0 0.5 1.7 -0.2 -1.4 -1.8 -0.9 0.1 0.3 0.1 0.5 0.8 0.5 0.8 0.6 Commodity-exporting EMDE -11.1 - -0.2 - - - -0.1 -1.7 -1.1 - - - - - - - - - Other EMDE -9.3 -5.8 -0.4 -4.6 0.6 2.0 -0.3 -1.2 -2.2 -1.2 0.0 0.3 0.2 0.6 0.9 0.5 0.9 0.7 East Asia and Pacific -11.3 -7.3 -0.7 -4.9 0.4 1.6 -0.4 -1.3 -2.4 -1.2 -0.1 0.4 0.1 0.8 0.8 0.1 0.9 0.6 Europe and Central Asia -6.8 3.7 1.1 -4.3 2.9 3.2 0.1 -0.9 -1.8 -1.7 1.9 0.7 0.3 -0.1 1.3 2.0 1.0 1.6 Latin America and Caribbean -5.3 1.1 1.6 -0.9 0.8 1.4 -0.1 -0.6 -0.6 0.1 0.5 0.4 0.0 0.9 0.1 0.3 0.8 0.5 Middle East and North Africa -17.1 - -2.0 - - - -0.5 -2.6 - - - - - - - - - - South Asia 10.9 3.5 2.7 -3.1 2.1 4.8 1.4 -1.2 -1.6 -0.3 0.6 0.5 1.0 0.8 2.0 1.9 1.5 1.3 Sub-Saharan Africa -12.0 - - - - - - - - - - - - - - - - - 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. Produced by DECPG. Number 364 | October 20, 2017 Financial Markets 1 2016 2017 2016 2017 MRV 2015 2016 Q3 Q4 Q1 Q2 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.39 0.45 0.70 0.95 0.41 0.41 0.55 0.66 0.66 0.79 0.91 0.90 1.04 1.15 1.15 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 0.79 0.92 1.07 1.20 0.88 0.91 0.98 1.03 1.04 1.13 1.16 1.19 1.26 1.31 1.31 1.32 1.36 EURIBOR 3-months -0.02 -0.26 -0.30 -0.31 -0.33 -0.33 -0.31 -0.31 -0.32 -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 1.56 2.12 2.44 2.25 1.74 2.12 2.50 2.44 2.42 2.47 2.29 2.29 2.18 2.32 2.21 2.19 2.30 German Bund, 10 yr 0.54 0.14 -0.07 0.18 0.35 0.30 0.03 0.22 0.30 0.34 0.32 0.39 0.25 0.36 0.28 0.55 0.42 0.41 0.37 Spreads (basis points) JP Morgan Emerging Markets 415 410 372 369 340 325 357 380 370 354 338 329 331 320 325 327 325 314 303 Asia 224 221 197 197 175 169 192 201 198 185 173 166 173 167 166 163 163 157 146 Europe 348 302 282 283 261 242 274 294 282 272 258 253 250 237 240 243 234 224 224 Latin America & Caribbean 540 537 477 475 445 427 453 491 481 463 442 431 431 420 430 435 435 416 404 Middle East 456 517 508 467 396 362 487 475 438 416 396 377 350 353 382 382 382 384 379 Africa 415 518 461 436 389 386 441 444 422 401 387 380 400 376 383 394 378 367 357 Stock Indices (end of period) Global (MSCI) 399 424 418 424 449 465 413 413 424 433 445 449 455 464 465 478 478 487 496 Advanced Economies ($ Index) 1663 1761 1726 1761 1854 1916 1697 1712 1761 1792 1839 1854 1878 1912 1916 1961 1960 2001 2030 United States (S&P 500) 2044 2258 2168 2258 2363 2423 2139 2199 2258 2279 2364 2363 2384 2421 2423 2470 2472 2519 2561 Europe (S&P Euro 350) 1474 1475 1388 1475 1547 1534 1377 1388 1475 1463 1501 1547 1564 1576 1534 1526 1512 1571 1586 Japan (Nikkei 225) 18817 19302 16450 19302 18909 20033 17050 18604 19302 19035 19342 18909 19197 19836 20033 19974 19720 20356 21450 Emerging Market and Developing Economies (MSCI) 794 861 903 861 958 1011 908 863 861 909 936 958 978 1005 1011 1066 1088 1082 1127 EM Asia 404 419 448 419 474 512 444 426 419 443 459 474 484 505 512 538 544 543 569 EM Europe 244 295 273 295 301 304 274 273 295 302 296 301 313 308 304 315 336 331 336 EM Europe & Middle East 211 248 233 248 252 251 232 230 248 253 249 252 259 255 251 261 274 268 272 EM Latin America & Caribbean 1830 2341 2381 2341 2611 2544 2608 2330 2341 2516 2600 2611 2601 2532 2544 2752 2873 2917 2953 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.90 0.93 0.94 0.91 0.91 0.93 0.95 0.94 0.94 0.94 0.93 0.91 0.89 0.87 0.85 0.84 0.85 Japan 121.00 108.80 102.36 109.63 113.63 111.10 103.72 108.90 116.28 115.03 112.96 112.91 110.02 112.36 110.91 112.31 109.78 110.80 111.82 Emerging and Developing Economies Brazil 3.33 3.49 3.25 3.28 3.14 3.21 3.18 3.33 3.35 3.20 3.10 3.13 3.14 3.20 3.30 3.20 3.15 3.13 3.15 China 6.29 6.65 6.67 6.84 6.89 6.86 6.74 6.85 6.92 6.89 6.87 6.90 6.89 6.88 6.81 6.77 6.67 6.57 6.58 Egypt 7.70 10.12 8.87 14.71 17.82 18.10 9.25 16.34 18.56 18.68 17.01 17.76 18.09 18.10 18.11 17.92 17.75 17.65 17.62 India 64.14 67.19 66.94 67.39 66.97 64.48 66.73 67.60 67.86 68.06 67.01 65.83 64.52 64.46 64.45 64.44 63.97 64.46 64.93 Russia 61.34 67.06 64.61 62.95 58.67 57.17 62.57 64.25 62.03 59.76 58.42 57.83 56.53 56.88 58.10 59.72 59.42 57.66 57.34 South Africa 12.77 14.71 14.07 13.92 13.24 13.21 13.92 13.96 13.88 13.60 13.17 12.95 13.46 13.25 12.91 13.15 13.25 13.17 13.27 Memo: U.S. nominal effective rate (index) 114.7 119.7 118.4 122.5 123.4 120.7 119.7 122.9 124.9 124.8 123.0 122.5 121.6 121.0 119.4 117.9 116.4 115.4 117.1 1 MRV = Most Recent Value. Commodity Prices 1 2016 2017 2016 2017 MRV 2015 2016 Q3 Q4 Q1 Q2 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2 Energy 65 55 57 64 68 64 64 59 68 69 69 65 67 64 60 62 65 69 69 2 Non-energy 82 80 82 83 86 82 81 83 84 85 87 85 83 83 82 83 84 86 86 2 Agriculture 89 89 91 90 91 88 90 90 89 91 91 89 88 89 87 88 87 88 88 2 Metals and minerals 68 64 64 71 78 74 65 73 75 76 79 79 75 73 72 76 83 84 84 Memo items: Crude oil, average ($/bbl) 51 43 45 49 53 50 49 45 53 54 54 51 52 50 46 48 50 53 55 Gold ($/toz) 1161 1249 1334 1221 1219 1258 1267 1238 1157 1192 1234 1231 1267 1246 1260 1237 1283 1314 1314 Baltic Dry Index 711 676 736 994 938 1023 870 1080 1031 913 760 1142 1229 979 861 906 1144 1363 1485 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 364 | October 20, 2017