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Pace of U.S. GDP growth slows in fourth quarter of last year.

Financial Markets

Companies worldwide have issued a record €60 billion ($65 billion) of investment -grade bonds in the
single currency this month as they have taken advantage of ultra-low borrowing costs and robust demand
for raise fund throughout the currency-bloc. Corporate borrowers outside of the Euro Area have
accounted for 65% of the issuances with 33% from U.S. companies. Benchmark yields in many European
economies are negative when adjusted for inflation, and the gap between yields on U.S. 10-year
Treasuries and comparable German bonds has widened to 175 basis points as the European Central
Bank has kick-started its new QE program.

Equity funds worldwide posted the largest outflows in 7 weeks as investors’ risk aversion grew amid
political unrest in Yemen, worries about U.S. growth, and global corporate earnings. Investors around the
world pulled $6 billion from stock funds in the week ending March 25, after posting massive inflows of
$20.1 billion the previous week, while bond funds attracted $5.7 billion to mark their 12 th consecutive
week of inflows, with investment-grade bond funds accounting for $4.3 billion. Notably, European equity
funds received $5.4 billion of inflows, helped by continued strong investment by American investors, while
U.S. focused equity funds posted $10.8 billion of outflows.



High Income Economies

As upward revisions to exports and consumer spending were offset by a downward revision to private
inventory investment, U.S. GDP expanded 2.2 % (q/q saar) in Q4 2014 in line with earlier estimates.
 Economists had been expecting the pace of GDP growth to be upwardly revised to 2.4%, following the
5.0% growth in Q3. For the 2014 as a whole, the U.S. economy expanded 2.4%, after expanding 2.2% in
2013.



Developing Economies

East Asia and Pacific

As decreases in product prices outweigh declines in raw material costs, China's industrial profits dropped
in the first two months of 2015, the National Bureau of Statistics revealed Friday. Industrial profits fell
4.2% (y/y) or CNY 169 billion in the January to February period to CNY 745.24 billion, compared to the
8.0% fall seen in December.


Latin America and the Caribbean

According to preliminary estimates, Brazil's economy unexpectedly expanded for a second successive
quarter in Q4 2014. GDP grew 0.3% (q/q), up from Q3’s 0.2% increase. Economists had expected a

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0.1% fall. For the full year 2014, the economic growth was 0.1%, which was much weaker than the 2.7%
expansion registered in 2013.

According to a survey conducted by the National Food Security Council (CNSA) of Haiti, 93% of
Haitian families participating in the program ProHuerta, have enhanced their food situation. The program,
which originated in Argentina, has been implemented for a decade in Haiti in collaboration with the
Ministry of Social Development and the Ministry of Foreign Affairs of Argentina. Thus far, the local
program has involved 21000 orchards, 1500 promoters and has benefited more than 140,000 "family
gardeners." The survey found that that 86% of households have access to a greater variety and quantity
of food, which leads to lower food expenditures. As a result, household spending fell from 66% of monthly
income to 33%.

March 27, 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:
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