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China’s GDP growth slows in 2015


Financial Markets

Global equities on Tuesday bounced back from a rout at the start of the year as investors were relieved
that China’s growth rate was in broadly in line with consensus expectations, easing fears of a hard
landing. The MSCI Asia-Pacific index outside Japan advanced 1.6 percent with China’s Shanghai
Composite Index rallying 3.2 percent. The main three European indices, including the FTSE 100, the
DAX, and the CAC 40, all rose more than 1 percent in morning session. U.S. equities opened higher as
well, but they pared gains as a renewed slid in U.S. oil prices damped investors’ risk appetite.

Sub-Saharan African Eurobonds are experiencing the worst start to a year on record, accounting for half
of the 20 worst-performing dollar bonds issued by developing countries in 2016, according to the
Bloomberg USD Emerging Market Sovereign Bond Index. African securities have dropped 5.4 percent
this year, compared to the average 1.3 percent loss in emerging markets, the worst first two weeks of a
year since data compiling began in 2010. Average yields on African bonds have jumped to 9.4 percent
this year as yields on dollar debt from Zambia and Ghana have surged above 15 percent.


Advanced Markets

The U.S. National Association of Home Builder’s confidence index remained in positive territory at 60 in
January, unchanged from the reading in December. Steady job market gains are supporting the housing
market, despite the beginning of the Federal Reserve’s monetary policy tightening cycle.

Inflation in the Euro Area was 0.2 percent (y/y) in December of 2015, unchanged from the previous
month. The largest price increases were in restaurants and cafes, tobacco and vegetables, which partly
offset by lower energy costs. Core inflation was 0.9 percent in December, also unchanged from
November.

Industrial production in Japan contracted by 0.9 percent (m/m) in November of 2015, led by a 2.4 percent
fall in shipments. Year-on-year, output gained 1.7 percent, rebounding from a 1.4 percent fall the
previous month.


Emerging and Developing Economies

East Asia and the Pacific

Chinese GDP grew by 6.9 percent in 2015, slowing from 7.3 percent in 2014, and broadly in line with
expectations. The pick-up in growth of services and consumption was offset by a slowing of
manufacturing and exports.

Europe and Central Asia

The central bank of Azerbaijan announced a 20 percent tax on taking money out of the country. The
imposition of capital controls is in response to the economic difficulties caused by the fall in oil prices.

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Since the peg to the U.S. dollar was abandoned in December, the manat has lost about one third of its
value against the dollar.

Latin America and the Caribbean

Venezuela’s GDP declined by 7.1 percent in the first nine months of 2015 compared with the same period
in 2014, according to the first statistics published by the central bank in a year. Inflation jumped to 141.5
percent at the end of September 2015, compared with 68.5 percent at the end of 2014.

South Asia

India’s trade deficit widened to $11.6 billion in December, from a deficit of $9.8 billion in November.
Exports fell 15 percent (y/y) while imports dropped by only 4 percent, with a jump in gold imports
dampening an overall reduction of imports.



January 19, 2016



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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