For more information, visit http://www.worldbank.org/prospects June 30, 2017 Taking Stock U.S. Q1 GDP growth was revised up; PCE inflation eased further in May; consumer sentiment softened in June. The final reading of U.S. GDP growth in Q1 came in at 1.4 percent (q/q, ssar), above the second estimate of 1.2 percent but below the 2.1 percent pace recorded in Q4 2016. The upward revision reflected stronger-than-previously-estimated personal consumption expenditures and exports, partially offset by weaker business investment. Meanwhile, core personal consumption expenditures (PCE) inflation—which excludes food and energy—eased for the third consecutive month in May, to 1.4 percent (y/y)—down from 1.5 percent in April. Headline PCE price inflation also came in at 1.4 percent, down from 1.7 percent in April. Separately, the University of Michigan’s consum er sentiment index—a gauge of U.S. consumer sentiment— fell from 97.1 in May to 95.1 in June. Euro Area headline inflation eased to a six-month low; economic sentiment hit 10-year high. The preliminary estimate of Euro Area inflation for June came in at 1.3 percent (y/y), below the previous month’s reading of 1.4 percent, mainly reflecting a decrease in energy prices. Core inflation —which excludes energy, food, alcohol, and tobacco prices—increased from 0.9 percent in May to 1.1 percent in June. Meanwhile, the Euro Area’s Economic Sentiment Indicator (ESI) rose from 109.2 in May to 111.1 in June, reaching the highest level since August 2007, mainly reflecting an increase in confidence in the retail trade and construction sectors. Japan’s industrial production contracted in May; retail sales slowed. The initial reading of Japan’s industrial production contracted 3.3 percent (m/m, sa) in May, following a 4 percent rise in April, reflecting declines in transport equipment, general purpose and business-oriented machinery, and fabricated metals. Japan’s retail sales growth slowed to 2 percent (y/y) in May, down from 3.2 percent in the previous month. Sales at supermarkets and department stores dropped 0.6 percent in May, following a rebound of 1.1 percent in April. China’s industrial profits expanded in May. Profits in industrial enterprises expanded 16.7 percent (y/y) in May, up from a 14 percent gain in the previous month. In the first five months of 2017, profits increased by 22.7 percent relative to the same period in 2016. South Africa’s producer prices rose modestly in May; employment fell in Q1. Producer price inflation for final manufactured goods came in at 4.8 percent (y/y) in May, up from 4.6 percent in April, driven by food, beverages, and tobacco products. Employment in the non-agricultural sector decreased to 9.64 million people in Q1, from 9.69 million in 2016 Q4. Figure 1 U.S. GDP growth for Q1 was revised up. Figure 2 Euro Area Inflation eased to a 6-month low in June. U.S. GDP, annualized quarterly change Euro Area Inflation Percent Percent 6 2.5 5 2.0 4 1.5 3 1.0 2 1 0.5 0 0.0 -1 -0.5 -2 -1.0 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 Jun-14 Jun-15 Dec-15 Jun-16 Jun-17 Dec-14 Dec-16 Source: Bloomberg. Source: Eurostat. Produced by DECPG. Number 353 | June 30, 2017 Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: Fri, 23 June - Friday, 30 June 2017 Upcoming releases: Monday, 3 July - Thu, 6 July 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous Netherland 6/23/17 GDP Q1 3.2 % 2.4% Thailand 7/3/17 CPI JUN 0.0 % France 6/23/17 GDP Q1 1.1 % 1% 1.1 % Indonesia 7/3/17 CPI JUN 4.3% United States 6/29/17 GDP Q1 2.1 % 2.0 % Turkey 7/3/17 CPI JUN 11.7% Japan 6/29/17 CPI MAY 0.4 % -0.7% 0.4 % South Korea 7/3/17 CPI JUN 2.0 % Denmark 6/30/17 GDP Q1 2.6 % 2.2 % Philippines 7/4/17 CPI JUN 3.1 % UK 6/30/17 GDP Q2 2.0 % 2.1 % 2.0 % Netherland 7/6/17 CPI MAY 1.1 % 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 Q2 Q3 Q4 Q1 June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May 1 Industrial Production, sa World 1.9 2.2 2.4 2.8 5.3 3.6 2.1 1.8 2.4 2.0 2.2 3.3 3.7 3.1 3.5 4.0 3.9 - Advanced Economies 0.2 0.2 0.4 1.7 3.8 1.5 -0.2 -0.4 0.6 0.3 0.2 1.9 2.5 1.1 2.2 2.3 2.6 - Emerging Market and Developing Economies 3.5 4.1 4.3 3.9 6.8 5.9 4.3 4.0 4.2 3.8 4.2 4.6 4.9 5.2 4.8 5.8 5.3 - Commodity-exporting EMDE 0.2 1.2 0.8 2.8 4.8 2.5 1.6 1.9 1.3 1.0 1.3 2.3 3.3 2.9 2.3 3.0 4.1 - Other EMDE 5.0 5.3 5.8 4.3 7.7 6.6 5.4 4.8 5.4 4.9 5.2 5.6 5.6 6.1 5.7 6.6 5.6 5.7 East Asia and Pacific 5.8 5.8 7.3 5.5 6.0 7.2 6.2 6.0 6.3 5.5 5.6 5.9 6.0 6.2 6.1 7.2 6.3 6.2 East Asia excl. China 3.5 4.5 8.2 3.9 3.1 4.4 6.8 6.8 5.9 2.2 2.5 4.3 6.1 4.8 4.8 5.0 4.7 - Europe and Central Asia 1.5 2.0 0.6 -2.2 9.8 5.7 2.0 0.2 1.8 0.6 1.5 2.8 2.7 4.4 1.4 4.4 4.4 6.7 Latin America and Caribbean -3.1 -2.9 0.1 0.4 -0.9 0.0 -2.4 -2.3 -2.9 -2.0 -2.8 -0.9 0.9 0.0 0.6 -0.9 -0.3 - Middle East and North Africa 2.8 - -2.9 8.3 - - 2.9 3.7 3.1 4.3 6.5 - - - - - - - South Asia 3.5 5.7 4.9 2.0 4.3 2.9 6.6 5.9 5.4 4.5 5.1 5.7 3.0 3.8 2.4 4.4 3.7 - Sub-Saharan Africa 0.1 0.8 6.6 -6.1 -3.5 -3.1 4.2 1.4 0.1 0.0 -1.1 0.6 -0.9 0.0 -2.8 -2.1 -0.1 - Inflation, sa 2 World 1.4 1.3 1.6 1.3 1.6 2.4 1.6 1.5 1.2 1.4 1.5 1.5 1.8 2.3 2.4 2.4 2.3 2.1 Advanced Economies 0.1 0.4 0.2 0.4 0.8 1.6 0.4 0.4 0.4 0.5 0.6 0.7 1.1 1.5 1.8 1.6 1.9 1.5 Emerging Market and Developing Economies 2.5 2.3 2.8 2.8 2.4 3.4 2.5 2.8 2.7 2.9 2.4 2.4 2.5 2.9 3.4 3.5 3.5 3.4 Commodity-exporting EMDE 3.9 3.5 3.6 3.2 3.2 3.5 3.5 3.5 3.2 3.1 2.9 2.9 3.1 3.4 3.5 3.6 3.7 3.6 Other EMDE 1.0 1.1 1.8 1.6 1.7 3.1 1.5 1.8 1.5 1.4 1.5 1.6 1.8 2.6 3.2 3.5 3.1 3.2 East Asia and Pacific 1.3 1.4 1.6 1.9 2.0 2.4 1.8 1.9 1.6 2.1 1.6 1.8 2.1 2.7 3.2 3.5 3.3 3.2 Europe and Central Asia 1.9 0.4 0.3 0.5 1.0 2.4 0.4 1.2 0.5 0.5 0.9 0.9 1.5 2.4 2.5 2.7 2.6 2.3 Latin America and Caribbean 2.7 2.4 3.5 3.0 3.1 3.4 3.3 2.9 3.1 3.1 2.9 3.2 3.2 3.1 3.3 3.2 3.6 3.1 Middle East and North Africa 1.9 2.2 2.3 2.3 1.9 2.5 2.4 2.3 2.1 2.5 1.9 2.0 1.8 2.2 2.5 2.9 2.0 2.0 South Asia 4.5 4.9 5.3 5.3 3.9 4.3 5.7 5.7 5.2 5.0 4.2 3.7 3.7 3.7 4.2 5.0 3.9 3.6 Sub-Saharan Africa 3.6 5.3 5.0 5.7 5.5 6.7 5.4 4.9 5.9 5.8 5.8 4.9 6.5 6.7 6.7 6.8 6.7 6.5 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 Q2 Q3 Q4 Q1 June Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Exports, Nominal, US$, sa World -11.5 -3.0 15.5 -0.8 7.9 18.2 -4.1 -6.9 2.8 -0.8 -3.3 4.9 4.1 10.4 7.1 12.3 4.0 - Advanced Economies -11.3 -0.8 16.6 -1.1 4.4 15.9 -2.3 -5.5 5.4 1.4 -1.8 6.1 5.7 9.3 7.3 9.5 1.0 - Emerging Market and Developing Economies -12.0 -6.6 13.6 -0.3 14.9 22.6 -7.1 -9.1 -1.7 -4.4 -5.6 3.0 1.5 12.7 6.8 17.6 9.8 - Commodity-exporting EMDE -24.2 -9.3 16.2 5.4 28.1 48.7 -13.5 -15.1 -1.9 -1.7 -5.6 7.6 7.8 26.7 19.5 24.7 - - Other EMDE -3.8 -4.6 12.6 -2.3 10.2 13.9 -3.1 -5.6 -0.9 -4.9 -5.0 1.8 -0.5 7.8 2.4 15.1 7.9 - East Asia and Pacific -3.5 -6.1 13.4 -2.4 11.1 15.7 -5.4 -6.9 -1.6 -6.9 -6.0 1.7 -2.2 9.1 2.4 16.2 9.6 10.6 Europe and Central Asia -20.7 -6.1 21.6 -2.1 20.8 37.4 -4.2 -8.9 0.5 -1.1 -3.6 6.5 7.7 22.2 12.6 21.2 6.8 - Latin America and Caribbean -11.9 -2.4 9.3 6.6 14.3 29.8 -8.0 -7.6 2.6 2.9 -4.4 10.2 10.9 14.7 12.4 16.9 8.9 - Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - South Asia -4.8 1.6 4.1 -18.3 31.5 2.4 5.1 -4.0 5.8 -3.2 10.6 3.3 0.2 2.9 -0.1 7.6 5.2 - Sub-Saharan Africa -26.8 -14.8 21.4 -2.8 29.0 - -18.6 -22.3 -12.7 -2.7 -9.8 0.5 2.9 23.0 26.2 - - - Imports, Nominal, US$, sa World -6.8 -5.2 19.6 -17.8 21.0 18.7 -4.4 -10.9 -6.8 -5.6 -9.6 3.6 -1.7 11.5 5.4 10.3 -5.9 - Advanced Economies -12.5 -3.4 10.0 -3.0 2.1 20.3 -4.6 -8.2 1.7 -1.9 -5.0 2.4 1.2 9.4 3.1 8.6 2.7 - Emerging Market and Developing Economies -3.3 -6.3 25.7 -25.5 34.0 17.7 -4.2 -12.4 -11.6 -7.8 -12.1 4.4 -3.2 12.8 6.8 11.3 -10.4 - Commodity-exporting EMDE -0.9 -7.1 28.0 -31.8 38.5 11.0 -3.9 -12.7 -15.5 -9.8 -14.9 4.2 -5.2 12.0 2.3 8.9 - - Other EMDE -11.5 -3.3 17.7 1.2 19.8 42.8 -5.7 -11.3 3.5 -0.2 -0.3 5.3 3.8 15.3 23.2 19.8 11.0 - East Asia and Pacific -13.1 -3.6 21.4 4.0 21.8 52.2 -6.6 -10.8 5.7 0.0 -0.7 6.0 5.6 17.1 33.5 20.7 12.6 17.8 Europe and Central Asia -20.7 -1.3 13.3 -3.8 7.1 46.9 0.3 -9.7 8.8 1.5 0.8 5.8 6.4 21.6 8.2 14.1 7.2 - Latin America and Caribbean -9.8 -7.4 7.7 2.0 5.6 26.6 -8.8 -15.5 1.5 -3.3 -8.4 1.7 3.9 11.3 5.3 13.8 -1.7 - Middle East and North Africa 1.5 - - - - - - - - - - - - - - - - - South Asia -13.2 -5.3 3.3 10.4 59.7 34.5 -6.4 -14.9 -9.4 0.4 9.5 12.0 2.8 14.8 21.5 40.5 41.3 - Sub-Saharan Africa -7.6 - - - - - - - - - - - - - - - - - 1 International Reserves, US$ World -5.9 -1.1 0.8 0.4 -3.3 1.7 0.8 0.3 -0.1 0.2 -1.1 -1.7 -0.6 0.7 0.3 0.7 0.8 - Advanced Economies 0.6 4.4 1.7 1.4 -2.5 3.4 1.4 0.5 0.1 0.9 -0.7 -1.5 -0.2 1.5 0.4 1.5 1.2 - Emerging Market and Developing Economies -9.9 -4.8 0.2 -0.2 -3.9 0.5 0.5 0.2 -0.2 -0.2 -1.4 -1.8 -0.9 0.1 0.2 0.1 0.5 - Commodity-exporting EMDE -11.1 - -0.7 -0.2 - - 0.0 0.4 -0.5 -0.1 -1.7 -1.1 - - - - - - Other EMDE -9.1 -5.7 0.7 -0.3 -4.5 0.5 0.7 0.1 -0.1 -0.2 -1.2 -2.1 -1.2 0.0 0.2 0.3 0.6 0.8 East Asia and Pacific -11.3 -7.3 0.3 -0.7 -4.9 0.4 0.9 0.0 -0.3 -0.4 -1.3 -2.4 -1.2 -0.1 0.4 0.1 0.8 0.8 Europe and Central Asia -6.3 4.4 2.7 1.2 -3.8 2.7 1.4 0.5 0.5 0.3 -0.8 -1.7 -1.4 2.1 0.4 0.2 0.0 1.2 Latin America and Caribbean -5.3 1.1 0.7 1.6 -0.9 0.8 0.1 1.6 0.0 -0.1 -0.6 -0.6 0.1 0.5 0.4 0.0 1.0 0.1 Middle East and North Africa -17.1 - -2.6 -2.0 - - -1.3 -0.7 -0.8 -0.5 -2.6 - - - - - - - South Asia 11.6 3.5 2.0 3.3 -2.8 1.7 0.8 1.4 0.6 1.4 -1.0 -0.9 -0.9 -0.1 0.5 1.3 0.6 1.4 Sub-Saharan Africa -12.0 - -1.9 - - - - - - - - - - - - - - - 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. Produced by DECPG. Number 353 | June 30, 2017 Financial Markets 2016 2017 2016 2017 MRV 1 2015 2016 Q2 Q3 Q4 Q1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.37 0.39 0.45 0.70 0.38 0.39 0.40 0.40 0.41 0.41 0.55 0.66 0.66 0.79 0.91 0.90 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 0.64 0.79 0.92 1.07 0.65 0.70 0.81 0.85 0.88 0.91 0.98 1.03 1.04 1.13 1.16 1.19 1.30 EURIBOR 3-months -0.02 -0.26 -0.26 -0.30 -0.31 -0.33 -0.27 -0.29 -0.30 -0.30 -0.31 -0.31 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 US 10-yr Treasury yield 2.12 1.84 1.75 1.56 2.12 2.44 1.64 1.48 1.56 1.63 1.74 2.12 2.50 2.44 2.42 2.47 2.29 2.29 2.22 German Bund, 10 yr 0.54 0.14 0.12 -0.07 0.18 0.35 0.01 -0.09 -0.07 -0.05 0.03 0.22 0.30 0.34 0.32 0.39 0.25 0.36 0.37 Spreads (basis points) JP Morgan Emerging Markets 415 410 419 372 369 340 418 387 367 361 357 380 370 354 338 329 331 320 327 Asia 224 221 227 197 197 175 233 210 190 191 192 201 198 185 173 166 173 167 164 Europe 348 302 305 282 283 261 303 290 282 273 274 294 282 272 258 253 250 237 243 Latin America & Caribbean 540 537 551 477 475 445 541 496 473 463 453 491 481 463 442 431 431 420 435 Middle East 456 517 538 508 467 396 545 540 492 493 487 475 438 416 396 377 350 353 388 Africa 415 518 548 461 436 389 546 494 448 440 441 444 422 401 387 380 400 376 380 Stock Indices (end of period) Global (MSCI) 399 424 399 418 424 449 399 414 417 418 413 413 424 433 445 449 455 464 466 Advanced Economies ($ Index) 1663 1761 1653 1726 1761 1854 1653 1713 1720 1726 1697 1712 1761 1792 1839 1854 1878 1912 1920 United States (S&P 500) 2044 2258 2099 2168 2258 2363 2099 2170 2171 2168 2139 2199 2258 2279 2364 2363 2384 2421 2420 Europe (S&P Euro 350) 1474 1475 1339 1388 1475 1547 1339 1376 1390 1388 1377 1388 1475 1463 1501 1547 1564 1576 1540 Japan (Nikkei 225) 18817 19302 15576 16450 19302 18909 15576 16556 16887 16450 17050 18604 19302 19035 19342 18909 19197 19836 19999 Emerging Market and Developing Economies (MSCI) 794 861 834 903 861 958 834 879 894 903 908 863 861 909 936 958 978 1005 1014 EM Asia 404 419 407 448 419 474 407 431 442 448 444 426 419 443 459 474 484 505 514 EM Europe 244 295 265 273 295 301 265 264 269 273 274 273 295 302 296 301 313 308 305 EM Europe & Middle East 211 248 225 233 248 252 225 227 232 233 232 230 248 253 249 252 259 255 251 EM Latin America & Caribbean 1830 2341 2269 2381 2341 2611 2269 2359 2402 2381 2608 2330 2341 2516 2600 2611 2601 2532 2532 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.89 0.90 0.93 0.94 0.89 0.90 0.89 0.89 0.91 0.93 0.95 0.94 0.94 0.94 0.93 0.91 0.88 Japan 121.00 108.80 107.96 102.36 109.63 113.63 105.34 104.09 101.31 101.69 103.72 108.90 116.28 115.03 112.96 112.91 110.02 112.36 112.13 Emerging and Developing Economies Brazil 3.33 3.49 3.51 3.25 3.28 3.14 3.42 3.28 3.21 3.25 3.18 3.33 3.35 3.20 3.10 3.13 3.14 3.20 3.31 China 6.29 6.65 6.53 6.67 6.84 6.89 6.59 6.68 6.65 6.67 6.74 6.85 6.92 6.89 6.87 6.90 6.89 6.88 6.81 Egypt 7.70 10.12 8.87 8.87 14.71 17.82 8.87 8.87 8.87 8.88 9.25 16.34 18.56 18.68 17.01 17.76 18.09 18.10 18.13 India 64.14 67.19 66.91 66.94 67.39 66.97 67.29 67.18 66.91 66.74 66.73 67.60 67.86 68.06 67.01 65.83 64.52 64.46 64.54 Russia 61.34 67.06 65.84 64.61 62.95 58.67 65.01 64.43 64.93 64.48 62.57 64.25 62.03 59.76 58.42 57.83 56.53 56.88 59.38 South Africa 12.77 14.71 15.01 14.07 13.92 13.24 15.05 14.40 13.79 14.01 13.92 13.96 13.88 13.60 13.17 12.95 13.46 13.25 13.01 Memo: U.S. nominal effective rate (index) 114.7 119.7 117.5 118.4 122.5 123.4 118.2 118.9 117.8 118.6 119.7 122.9 124.9 124.8 123.0 122.5 121.6 121.0 119.2 1 MRV = Most Recent Value. Commodity Prices 2016 2017 2016 2017 MRV 1 2015 2016 Q2 Q3 Q4 Q1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Energy 2 65 55 56 57 64 68 59 57 58 58 64 59 68 69 69 65 67 64 64 Non-energy 2 82 80 81 82 83 86 83 82 82 81 81 83 84 85 87 85 83 83 83 2 Agriculture 89 89 91 91 90 91 94 92 91 90 90 90 89 91 91 89 88 89 89 2 Metals and minerals 68 64 62 64 71 78 61 64 65 64 65 73 75 76 79 79 75 73 73 Memo items: Crude oil, average ($/bbl) 51 43 45 45 49 53 48 44 45 45 49 45 53 54 54 51 52 50 46 Gold ($/toz) 1161 1249 1260 1334 1221 1219 1276 1337 1340 1327 1267 1238 1157 1192 1234 1231 1267 1246 1246 Baltic Dry Index 711 676 613 736 994 938 608 707 675 826 870 1080 1031 913 760 1142 1229 979 903 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 353 | June 30, 2017