Global Monthly April 2017 Overview Table of Contents • Global industrial production and goods trade growth Monthly Highlights .............................................. 2 continued to recover from pronounced weakness in the first Special Focus ....................................................... 6 half of 2016. Key Publications of Prospects Group ...................... 8 • Consumer spending hit a soft patch in the United States, Recent World Bank Working Papers....................... 8 but consumer and business confidence generally remains high across advanced economies. Key World Bank Reports ...................................... 8 • Activity continued to be strong in China, and appears to Table A: Major Data Releases ............................... 8 have gained momentum in major commodity exporters. Table B: Activity and Inflation.............................. 9 • Policy uncertainty and geopolitical concerns dampened Table C: Trade and Finance ................................. 9 market sentiment early April, but global equity prices and Table D: Financial Markets ............................... 10 capital flows to emerging markets remained solid. Table E: Commodity Prices ................................. 10 WTI oil prices Chart of the Month US$/bbl 2015 average • Oil prices have been more volatile over the past two months, 2016 average affected by two opposing forces. 54 • Expectations of an extension of production cuts agreed in November 2016 by OPEC and some non-OPEC countries 50 led to upward pressure on prices toward the end of March. • However, high U.S. crude oil stocks and signs of a robust 46 recovery in U.S. shale activity contributed to a renewed decline since mid-April. 42 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 • Oil prices dropped back to around $50/bbl as data showed U.S. crude oil production recovering in April to its highest level since August 2015. Sources: Bloomberg. Note: WTI oil prices stand for West Texas Intermediate oil price futures. Five-day average of daily prices. Last observation is April 24, 2017. Special Focus: Spillovers to the United States from the Global Economy • The U.S. economy can be affected by global economic developments through trade and financial channels. • Trade represents more than one-quarter of U.S. GDP, while U.S. multinationals account for a substantial share of U.S. jobs, sales, and exports. U.S. multinationals are also deeply integrated into global supply chains. • Financial market stress in the rest of the world can adversely impact U.S. financing conditions. • Strong economic and financial linkages help explain the high synchronicity of U.S. and global business cycles. e Global Monthly is a publication of the Global Macroeconomics Team of the Prospects Group in the Development Economics Vice Presidency. is edition was prepared by Marc Stocker and Dana Vorisek, based on contributions from John Ba es, Mai Anh Bui, Sinem Celik, Gerard Kambou, Eung Ju Kim, Csilla Lakatos, Hideaki Matsuoka, Yoki Okawa, Temel Taskin, Ekaterine Vashakmadze, Collette Wheeler, and Lei Sandy Ye. is Global Monthly re ects information available as of April 24. For more information, visit: http:// www.worldbank.org/en/research/brief/economic-monitoring April 2017 Monthly Highlights FIGURE 1A Global industrial production growth Global economy: ongoing momentum. Following a pickup in Percent, 3m-on-3m, saar 16Q4, global growth continued to be supported in 17Q1 by a 6 Industrial production broad-based recovery in manufacturing activity, as well as by 2003-08 average 5 robust services activity. Global industrial production increased in 2011-16 average February at an annualized rate of 4.3 percent (3m-on-3m saar), 4 significantly above a post-crisis average of 2.8 percent (Figure 3 1.A). In March, the global manufacturing PMI was still near a six 2 -year high, while services PMIs also pointed to robust growth in 1 both advanced economies and emerging market and developing 0 economies (EMDEs). Available survey data for April showed 2012 2013 2014 2015 2016 2017 further improvements in activity in the Euro Area and Japan, whereas U.S. manufacturing and services PMIs declined to a 7- month low. Global inflation continued to pick up in February, FIGURE 1B Share of countries with annual CPI inflation below 1 percent reflecting the delayed impact of rising energy prices during 2016. Share of countries As a result, the share of countries with inflation below 1 percent 100 Advanced economies dropped considerably to 23 percent in advanced economies (from EMDEs 80 percent mid-2016) and to 11 percent in EMDEs (from 30 80 percent mid-2016)(Figure 1.B). 60 Global trade: rebound from 2016 weakness. Following a 40 significant pickup in 16Q4, global trade continued to grow at a robust pace in 17Q1. In January and February, global goods trade 20 volume growth reached 11 percent (3m-on-3m saar), its strongest 0 pace since August 2010. Container volumes transiting through 2005 2007 2009 2011 2013 2015 2017 major ports also reached record post-crisis levels in February, while PMI surveys in March point to robust gains in export FIGURE 1C Share of global goods trade orders, despite a slight slowdown from the previous month. Percent of total, average of 2011-15 Capital goods trade, which accounts for the largest share of world 35 goods trade, is likely to benefit from strengthening investment, 30 especially in advanced economies (Figure 1.C). 25 United States: sluggish private consumption. Underlying growth 20 momentum remains around 2 percent, but a temporary 15 slowdown in consumer spending held back activity in 17Q1. Real 10 personal consumption expenditures declined in both January and 5 February, likely depressed by temporary factors, including a 0 Capital Consumer Intermediate Raw weather-related drop in utilities spending, delayed tax refunds, goods goods goods materials and rising prices. In contrast, capital spending indicators remain Sources: Haver Analytics, World Bank, World Bank WITS. A. 3 month-on-3 month annualized growth rate of seasonally adjusted industrial strong, pointing to a significant rebound in both equipment and production . Last observation is February 2017. B. Inflation is the year-on-year change of CPI. Last observation is February 2017. residential investment in Q1. The latest consumer and business C. Disaggregation of products into capital goods, consumer goods, intermediates and raw materials is based on a correspondence between the Harmonized surveys are generally solid, although manufacturing and services system and the Broad Economic Categories (BEC). 2 April 2017 FIGURE 2A U.S. unemployment and PMIs slid to a 7-month low in April (52.8 and 52.5, underemployment rate respectively). Labor market conditions continued to improve Percent of labor force despite a partially weather-related slowdown in job creation in Unemployment 18 Underemployment March. The unemployment rate stood at 4.5 percent and broader 16 measures of underemployment continued to decline (Figure 2.A). 14 The U.S. administration presented on April 26 an outline for tax 12 reforms, including significant cuts in corporate and personal 10 income tax rates, in line with campaign promises. These 8 proposals, which would imply large revenue losses for the federal 6 government, will be discussed in congress in coming months. 4 2 Euro Area: solid momentum. Growth picked up to 1.9 percent 2007 2009 2011 2013 2015 2017 (q/q saar) in 16Q4 and momentum carried over into 2017. FIGURE 2B Euro Area business confidence Business confidence continued to increase in March, particularly in equipment-producing sectors (Figure 2.B), while the Percent, balance of answers 5 Industry Equipment composite PMI rose further in April, reaching a 72-month high (56.7). The unemployment rate declined in February to its lowest 0 level in almost eight years (9.5 percent), but both headline and -5 core-inflation stepped back in March, to 1.5 and 0.7 percent, -10 respectively. Long term market-based inflation expectations remained close to 1.6 percent in April. The first round of French -15 presidential elections was held on April 23. Candidates from the -20 centrist party “En Marche!” and the far-right “Front National” -25 were selected for the final round on May 7. Current polls indicate 2012 2013 2014 2015 2016 2017 a lead for “En Marche!” candidate, Emmanuel Macron. FIGURE 2C Nominal fixed asset investment growth in China Other advanced economies: resilient. Business conditions Percent, y-o-y, 6-month avg improved in Japan in Q1, according to the Tankan survey, and 30 State Private the manufacturing PMI rose to 52.8 in April, supported by rising export orders. The output gap estimated by the Bank of Japan turned positive and the unemployment rate stood at 2.8 percent 20 in February, the lowest level since June 1994. But wage growth is sluggish and inflation expectations remain low. Labor markets in 10 the United Kingdom remain tight with the unemployment rate at 4.7 percent in February. However, as inflation picked up on the back of a weaker pound sterling, real wage growth and 0 consumer confidence have softened in Q1. After Prime Minister 2013 2014 2015 2016 2017 May announced snap elections on June 8, the pound sterling Sources: European Commission, Haver Analytics, U.S. Bureau of Labor Statistics, World Bank. recovered to its highest level since October 2016. A. Seasonally adjusted monthly data. Underemployment is defined as the sum of unemployed, people marginally attached to the labor market and involuntary part time workers, in percent of the labor force. Last observation is March 2017. B. Arithmetic means of seasonally adjusted balances of answers to a selection of China: robust consumption and exports. Growth was resilient in questions. Last observation is March 2017. C. “State” indicates companies with public sector participation. Fixed asset 17Q1 (6.9 percent y/y), as private consumption accelerated and a investment differs from gross fixed capital formation reported in the national accounts by including land sales. Last observation is March 2017. rebound in external demand boosted export growth. Industrial 3 April 2017 production growth increased as well during 17Q1, reaching 7.6 FIGURE 3A EMDE industrial production growth percent (y/y) in March—its strongest reading since December 2014. State-driven investment growth eased after being lifted in Percent, y-o-y, 6-month avg Commodity importers ex. China the second half of 2016 by policy measures, while private sector Commodity exporters investment bottomed out, but remained weak in 17Q1 (Figure 5 2012-16 average 2.C). House price growth (y/y) continued to slow in the largest 2012-16 average 4 (Tier 1 and 2) cities, but picked up marginally in smaller (Tier 3) 3 cities. Financial sector regulation and monetary policy continued to be tightened in March and April. 2 1 Commodity-exporting EMDEs: bottoming out. Industrial 0 production (IP) in Brazil rose 3.3 percent (y/y) in February, the fastest pace in three years, confirming signs of an ongoing -1 2014 2015 2016 2017 recovery across commodity exporters (Figure 3.A). The central bank’s economic activity index rose from strongly contractionary FIGURE 3B Export orders in major EMDEs in 17Q1 rates in 2016 to 0.5 percent (y/y) in February, suggesting that the country has passed an inflection point. Russia’s Composite PMI Index, >50 is expansion 56 edged up to 56.0 in March, from 55.4 in February. Continued 54 gains in retail trade and easing inflation indicate that consumption began to strengthen in Q1 after contracting for 52 seven quarters. A strong rebound in mining output in South 50 Africa in February was offset by continued weakness in 48 manufacturing production and retail sales. The manufacturing 46 Brazil Indonesia Russia South India Mexico Poland Turkey PMI dipped to 52.2 in March, after two consecutive months of Africa increase. The recent credit rating downgrade to “junk” status is likely to further weaken sentiment. In Nigeria, the manufacturing PMI advanced in March but remained below the Commodity exporters Commodity importers 50 mark, suggesting continued manufacturing contraction. Oil FIGURE 3C U.S. 10-year Treasury yields production picked up on improved security in the oil producing region. Percent 2015-current average 2.6 Commodity-importing EMDEs: mixed signals. In India, IP 2.4 contracted in February, by 1.2 percent (y/y), after an upwardly revised 3.3 percent rise in January. Export orders rose in 17Q1, 2.2 but at a slow pace compared to other major commodity importers 2.0 (Figure 3.B). Mexico’s manufacturing PMI picked up in March, 1.8 to 51.5, following flat IP (-0.1 percent y/y) in February and a 1.6 continued rise in inflation. IP growth in Turkey moderated in Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 the first two months of 2017 to 0.8 percent (y/y), while the volume of retail sales contracted 4.5 percent (y/y). Inflation accelerated to a 10-year high of 11.3 percent in March. An April Sources: Bloomberg, Haver Analytics, World Bank. A. Six-month moving average of year-on-year growth rates, weighted by industry value added. Last observation is February 2017 for commodity importers ex. 15 constitutional referendum proposing greater authority for the China and January 2017 for commodity exporters. B. 3-month averages. Last observation is March 2017. president was narrowly approved. Poland has shown continued C. Last observation is April 24, 2017. momentum in IP and retail trade in 17Q1. 4 April 2017 Global financing conditions: modest repricing of risk. Financial FIGURE 4A Net flows to emerging market funds markets continue to reflect strengthening global growth US$, billions, 4-week sum prospects, although policy uncertainty and geopolitical risks 20 affected sentiment early April. Global equity markets weakened Equity Bond 15 somewhat as a result, and implied volatility in both equity and 10 bond markets temporarily rose from March lows. However, 5 perceived political risks declined following the benign outcome of the first round of the French presidential election, leading to a 0 rebound in global equity prices to a new record high. In the -5 United States, yields on 10-year Treasury notes dropped in April -10 to their lowest levels since the November elections (Figure 3.C), -15 mainly reflecting a decline in inflation expectations. Euro Area Jan-16 Jun-16 Nov-16 Apr-17 and Japan bond yields remained at very low levels as central banks continued exceptionally accommodative monetary policies. FIGURE 4B EMDE bond spreads Basis points 2010-current median EMDE financial markets: continued rebound. After a strong 550 first quarter, EMDE financial markets have continued to perform solidly through April. Capital flows into EMDE bond and equity 450 funds have continued to recover from end-2016 weakness (Figure 4.A). Bond issuance remained strong as well in April, with Saudi Arabia raising $9 billion in its first global Islamic bond sale. The 350 Middle East and North Africa region has led EMDE sovereign bond issues since the start of 2017, accounting for about 47 percent of the total. Driven in part by the recent decline in U.S. 250 yields, EMDE sovereign credit spreads bottomed out in April, 2014 2015 2016 2017 but remain significantly below median levels (Figure 4.B). FIGURE 4C Compliance rate to agreed OPEC production cuts in 17Q1 Commodity prices: mixed. Oil prices have been more volatile, Percent alternating between falls on announcements of larger-than- 160 expected U.S. stocks and shale oil activity, and rebounds on a 120 potential extension of production cuts by OPEC and some non- 80 OPEC countries. In 17Q1, OPEC’s net compliance has been nearly 100 percent, with production cuts even exceeding the 40 November agreement in Qatar, Angola, and Saudi Arabia (Figure 0 Angola Saudi Arabia Algeria Iraq Gabon Venezuela Total OPEC 11 Qatar Ecuador Kuwait UAE 4.C). However, signs of a robust recovery in U.S. crude oil production, which in April reached its highest level since August 2015, contributed to a renewed decline in oil prices. Metal prices softened in April due to concerns of slowing demand and unwinding of supply disruptions. Agricultural prices have Sources: Bloomberg, Haver Analytics, J.P. Morgan, World Bank. A. Four-week sum of weekly flows. Last observation is April 19, 2017. remained broadly stable as favorable growth conditions have B. EMBI spreads are the maturity matched, market value weighted, spread between EMDE sovereign issuers and U.S. Treasury bonds. Last observation is pushed stocks-to-use ratios (a measure of supply relative to April 21, 2017. C. Actual cuts from OPEC supply baseline (October 2016 secondary source demand) of all key grains to 15-year highs. figures, except Angola which is based on September 2016). 5 April 2017 Special Focus: Spillovers to the United FIGURE 5A Major partners’ share of U.S. trade States from the global economy Percent of total Exports Imports 20 Developments in the U.S. economy, because of its size and international linkages, are bound to have substantial implications 15 for the rest of the world. At the same time, the global economy is 10 important for the United States, and can affect its outlook through trade and financial interactions. This two-way 5 relationship suggests both spillover and spillback effects associated 0 with significant U.S. policy changes. Germany China Mexico Canada Japan Korea UK South Global trade. Trade accounts for more than one-quarter of U.S. GDP, with goods constituting over 65 percent of U.S. total FIGURE 5B Share of imports in U.S. consumption exports. Canada, China, Germany, Japan, Mexico, and the expenditures, 2009 United Kingdom are major destinations for U.S. goods and Percent 35 services, accounting for nearly 50 percent of total U.S. exports in 30 2016. Similarly, over 55 percent of total U.S. imports are sourced 25 20 from these six countries (Figure 5.A). A significant proportion of 15 10 U.S. consumption relies on imported goods. Approximately one- 5 third of U.S. consumer spending is on goods, of which about one 0 Recreational Durables ex. cars, en., cloth., footw. Motor vehicles Goods Services Clothing and Durable houshold PCE Nondurables ex. recr., hh. equip. footwear -sixth are imported. The share of imports in consumption goods equipment expenditures is larger for durable goods (29 percent)—especially durable household equipment, motor vehicles, and recreational goods—and clothing and footwear (32 percent) (Figure 5.B). Global value chain participation. Many U.S. companies are FIGURE 5C U.S. participation in global value chains deeply integrated into global supply chains. U.S. exports often Percent of exports serve as inputs into other countries’ production for exports (i.e. 25 “forward participation”): about one-quarter of U.S. exports represents value added that is embodied in other countries’ 20 exports, with particularly high forward participation with 15 NAFTA trading partners, such as Canada and Mexico, as well as 10 East Asian economies, such as China and South Korea. The average import content of U.S. exports (i.e., “backward 5 participation”) has also been on the rise and reached 15 percent 0 in 2011, but is still well below the average of other advanced Forward participation Backward participation economies (27 percent) (Figure 5.C). Sources: McCully (2011), U.S. Bureau of Economic Analysis, World Bank estimates, World Trade Organization. A. Exports and imports of goods and services in 2016. Multinational corporations. Although U.S. multinationals B. “Durables ex. cars, recr., hh. equip.” stands for durables ex. motor vehicles and parts, recreational goods and vehicles, and furnishings and durable household represent less than 1 percent of the total number of U.S. firms, equipment. “Nondurables ex. en., cloth., footw.” stands for nondurables ex. gasoline and other energy goods, clothing and footwear. C. Forward participation is the use of U.S. exports as inputs into other countries’ they have accounted for one-third of U.S. real GDP growth and production for exports. Backward participation is the use of imports as inputs into U.S. exports. Data as of 2011. 6 April 2017 almost half of U.S. labor productivity growth since 1990. These FIGURE 6A Role of foreign multinational companies are systemically important for both the U.S. and their corporations in the United States, 2010-2013 host economies. In fact, the largest U.S. exporters are Percent of U.S. total 30 multinationals, with roughly 17 percent of U.S. trade occurring 25 within multinational firms (intra-firm trade). Similarly, affiliates of foreign multinationals operating in the United States are vital 20 for the U.S. economy, accounting for 10 percent of U.S. 15 employment and close to one-third of U.S. sales (Figure 6.A). 10 5 Financial linkages. Financial linkages between the U.S. and the rest of the world have grown rapidly over the past decade, 0 Sales Exports Imports Employment potentially leading to two-way spillovers. International assets and liabilities are, on average, three times the size of U.S. GDP, and FIGURE 6B Variance share of U.S. and G6 growth the United States remains the world’s largest source and recipient Percent U.S. G6 of foreign direct investment flows, accounting for about one- 50 fourth of world FDI inflows and outflows in 2015. Financial 40 market stress or sharp growth slowdowns in the rest of the world 30 can impact the U.S. financial system through multiple channels. 20 The evolution of the U.S. dollar, which can be affected by 10 monetary policy decisions and economic developments in other jurisdictions, can also impact growth prospects and financing 0 Global Factor Advanced Economy conditions in the United States. Factor Spillovers from the world to the United States. Because of FIGURE 6C Spillover to United States from 1 strengthening economic and financial linkages with the rest of the percentage point increase in global, other AE, and EMDE growth world, U.S. business cycles have become highly synchronized Percentage point GDP growth with the global business cycle (Figure 6.B). Global developments 1.4 Industrial production often drive significant variation in business cycles in the United 1.2 1.0 States—for example, growth shocks originating in other 0.8 economies, especially in other advanced economies, have a 0.6 significant impact on activity in the U.S. through demand 0.4 0.2 spillovers. A 1 percentage point increase in advanced economy 0.0 output growth increases U.S. output growth by roughly 0.5 -0.2 percentage point within a year (Figure 6.C). These two-way -0.4 Global ex. AE ex. U.S. EMDE channels imply that, important as the U.S. economy is for the U.S. global economy, the U.S. economy is in turn affected by Sources: McCully (2011), Bureau of Economic Analysis, World Bank estimates. A. Share of MNCs in U.S. sales, exports and imports of goods, and employment. developments in the rest of the world. “Sales” indicates sales of MNCs in gross output of U.S. private sector industries. B. A dynamic factor model is estimated over the period 1985-2015 with 106 countries. Variance decompositions are computed for each country and, within each country, for output. Each bar represents the variance share of U.S. and G6 output growth attributable to the global factor, the AE-specific factor, and the idiosyncratic term. C. Cumulative impulse responses after one year of GDP or IP growth in the U.S. following a 1 percentage point increase in GDP or IP growth in 22 other AEs and 19 EMDEs (13 EMDEs for IP). Vertical lines indicate 16th-84th percentile confidence bands. Vector autoregression models are estimated for 1998Q1- 2016Q2 with four lags. 7 April 2017 Key Publications of Prospects Group Commodity Markets Outlook - April 2017 Global Economic Prospects - January 2017: Weak Investment in Uncertain Times Commodity Markets Outlook - January 2017: Investment Weakness in Commodity Exporters Commodity Markets Outlook - October 2016: OPEC in Historical Context Global Economic Prospects - June 2016: Divergences and Risks Recent World Bank Working Papers Implications of Minimum Wage Increases on Labor Market Dynamics: Lessons for Emerging Economies Re-evaluating Microfinance: Evidence from Propensity Score Matching Heterogeneous Technology Diffusion and Ricardian Trade Patterns Precarious Drop: Reassessing Patterns of Female Labor Force Participation in India Savings, Financial Development, and Economic Growth in the Arab Republic of Egypt Ageing Poorly? Accounting for the Decline in Earnings Inequality in Brazil, 1995–2012 Urbanization and Development: Is Latin America Different from the Rest of the World? The Distributive Impact of Terms of Trade Shocks Weakness in Investment Growth: Causes, Implications, and Policy Responses Regional Dimensions of Recent Weakness in Investment: Drivers, Investment Needs, and Policy Responses The Global Role of the U.S. Economy: Linkages, Policies, and Spillovers Key World Bank Reports World Development Report 2017: Governance and the Law Doing Business 2017: Equal Opportunity for All TABLE A: Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: March 24, 2017 - April 24, 2017 Upcoming releases: April 24, 2017 - May 24, 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous France 3/24/17 GDP Q4 1.1 % 1.2 % 0.9% France 4/28/17 GDP Q1 1.1 % Netherland 3/24/17 GDP Q4 2.8 % 2.3 % 2.5% Austria 4/28/17 GDP Q1 1.8 % South Korea 3/27/17 GDP Q4 2.4 % 2.3 % 2.6 % Spain 4/28/17 GDP Q1 3.0 % United States 3/30/17 GDP Q4 2.0 % 1.7 % UK 4/28/17 GDP Q1 0.7 % Turkey 3/31/17 GDP Q4 3.5 % -1.8 % United States 4/28/17 GDP Q1 2.0 % Denmark 3/31/17 GDP Q4 2.3 % 1.2 % Mexico 4/28/17 GDP Q1 2.2 % UK 3/31/17 GDP Q4 1.9 % 2.0% 2.2 % Indonesia 5/5/17 GDP Q1 4.9% Japan 3/31/17 CPI FEB 0.3 % 0.4 % 0.4 % Germany 5/12/17 GDP Q1 1.7 % Turkey 4/3/17 CPI MAR 11.3% 10.1% Thailand 5/15/17 GDP Q1 3.2 % South Korea 4/3/17 CPI MAR 2.2 % 1.8 % 1.9 % Greece 5/15/17 GDP Q1 -1.1 % Netherland 4/6/17 CPI MAR 1.1 % 1.8 % Portugal 5/15/17 GDP Q1 2.0 % Romania 4/7/17 GDP Q4 4.9 % 4.4% Italy 5/16/17 GDP Q1 1.0 % Brazil 4/7/17 CPI MAR 4.6% 4.8% Romania 5/16/17 GDP Q1 4.9 % Denmark 4/10/17 CPI MAR 1.0 % 1.0 % 1.0 % Czech Republic 5/16/17 GDP Q1 1.9 % Romania 4/11/17 CPI MAR 0.2 % 0.2 % Netherland 5/16/17 GDP Q1 2.8 % China 4/11/17 CPI MAR 0.9 % 0.8 % Poland 5/16/17 GDP Q1 3.1 % UK 4/11/17 CPI MAR 2.3 % 2.3 % 2.3 % Euro Area 5/16/17 GDP Q1 1.7 % France 4/13/17 CPI MAR 1.2 % 1.3 % Japan 5/17/17 GDP Q1 1.2 % United States 4/14/17 CPI MAR 2.4 % 2.7 % 2.7 % Philippines 5/17/17 GDP Q1 6.6 % China 4/17/17 GDP Q1 6.9 % 6.8 % 6.8 % Malaysia 5/18/17 GDP Q1 4.5 % Euro Area 4/19/17 CPI MAR 1.5 % 1.5 % 2.0 % Germany 5/23/17 GDP Q1 1.7 % 8 April 2017 TABLE B: Activity and Inflation (Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized) 2016 2016 2017 2015 2016 Q1 Q2 Q3 Q4 Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Industrial Production, sa 1 World 1.9 2.0 1.8 2.2 2.8 5.0 1.2 1.5 1.7 1.9 1.6 2.3 1.9 2.0 3.2 3.6 2.9 3.2 Advanced Economies 0.2 0.2 0.4 0.3 1.8 3.7 -1.2 -0.2 -0.3 -0.2 -0.4 0.6 0.2 0.2 1.9 2.5 1.0 2.1 Emerging Market and Developing Economies 3.6 3.9 3.3 4.1 3.8 6.3 3.7 3.2 3.7 3.9 3.6 3.9 3.5 3.8 4.6 4.7 4.9 4.4 Commodity-exporting EMDE 0.2 1.3 0.7 1.5 2.4 4.5 -0.4 -0.7 0.6 1.7 2.1 1.3 1.0 1.3 2.2 3.3 2.9 - Other EMDE 5.1 4.9 4.2 5.1 4.3 7.1 5.4 4.8 5.0 4.8 4.2 4.9 4.5 4.7 5.6 5.2 5.7 5.2 East Asia and Pacific 5.8 5.9 5.0 6.8 5.6 5.9 6.3 5.6 6.0 6.2 6.1 6.3 5.5 5.6 5.9 6.0 6.0 6.1 East Asia excl. China 3.5 4.8 5.4 5.5 3.6 2.9 3.3 2.9 6.0 7.0 6.9 6.1 2.2 2.6 4.3 6.1 3.7 4.6 Europe and Central Asia 1.5 2.0 1.1 1.8 -2.8 9.3 1.6 2.7 2.6 2.1 0.2 1.8 0.6 1.5 2.7 2.6 4.2 1.2 Latin America and Caribbean -3.1 -2.9 -3.1 -0.1 0.7 -0.9 -4.1 -4.7 -4.0 -2.3 -2.1 -2.8 -2.0 -2.7 -0.9 1.1 0.1 1.1 Middle East and North Africa 2.8 - 3.1 -3.4 8.4 - 2.7 2.0 2.4 2.9 3.7 3.1 4.3 6.5 - - - - South Asia 4.1 1.1 3.2 3.8 -0.1 0.5 2.0 -0.3 1.5 1.0 -0.5 0.7 0.4 -0.5 5.6 0.6 3.6 -0.3 Sub-Saharan Africa 0.1 0.9 1.1 7.0 -6.2 -3.3 -1.2 2.5 4.1 4.2 1.5 0.1 -0.1 -1.1 0.6 -0.9 0.2 -3.0 Inflation, sa 2 World 1.4 1.3 1.4 1.7 1.4 1.6 1.3 1.6 1.7 1.6 1.7 1.4 1.5 1.5 1.6 1.8 2.3 2.5 Advanced Economies 0.1 0.4 0.3 0.2 0.4 0.8 0.1 0.2 0.1 0.4 0.4 0.4 0.5 0.6 0.7 1.1 1.5 1.8 Emerging Market and Developing Economies 2.2 2.4 2.7 3.0 2.9 2.5 2.5 3.0 2.7 2.6 2.9 2.8 2.9 2.5 2.4 2.5 2.9 3.5 Commodity-exporting EMDE 3.7 3.5 4.0 3.9 3.4 3.3 4.0 3.9 3.5 3.9 3.8 3.3 3.1 2.9 3.0 3.2 3.5 3.8 Other EMDE 1.0 1.1 1.0 1.8 1.6 1.7 0.9 1.8 1.6 1.5 1.8 1.5 1.4 1.5 1.6 1.7 2.5 3.2 East Asia and Pacific 1.0 1.6 1.1 1.9 2.4 2.4 1.4 1.9 1.8 1.9 2.0 1.8 2.3 2.3 2.4 2.4 3.0 3.5 Europe and Central Asia 1.6 0.4 0.7 0.3 0.5 0.6 0.1 -0.1 -0.1 0.4 1.2 0.5 0.5 0.2 0.5 1.3 2.0 2.5 Latin America and Caribbean 2.7 2.4 2.7 3.5 3.0 3.1 2.5 3.6 3.4 3.3 2.9 3.2 3.1 2.9 3.2 3.2 3.1 3.4 Middle East and North Africa 1.9 2.2 2.5 2.3 2.3 1.9 2.6 2.4 2.2 2.4 2.3 2.1 2.5 1.9 2.0 1.8 2.2 2.6 South Asia 4.5 4.9 3.8 5.3 5.3 3.9 4.0 4.6 5.2 5.6 5.7 5.2 5.0 4.2 3.7 3.7 3.7 4.2 Sub-Saharan Africa 3.7 5.3 5.2 5.2 5.7 5.9 4.7 5.3 4.8 5.6 5.5 5.9 5.9 5.7 6.2 6.7 6.9 6.7 1Industrial production is total production (may exclude construction). When data are unavailable, "industrial production, manufacturing" and "industrial production, manufacturing, non-durable manufacturing, petroleum and coal products, crude petroleum products" are used as proxies. 2Median inflation rate for each grouping. TABLE C: 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 2016 2017 2015 2016 Q1 Q2 Q3 Q4 Mar Apr May June Jul Aug Sep Oct Nov Dec Jan Feb Exports, Nominal, US$, sa World -11.5 -3.0 -12.3 13.6 0.5 7.6 -3.9 -2.9 -3.1 -4.1 -6.7 2.8 -0.7 -3.3 4.9 4.1 10.5 7.5 Advanced Economies -11.3 -0.8 -4.9 15.2 0.3 3.7 -3.7 -0.1 -0.5 -2.4 -5.3 5.5 1.5 -1.8 6.1 5.7 9.2 7.9 Emerging Market and Developing Economies -12.0 -6.5 -23.3 10.8 0.9 15.2 -4.5 -7.4 -7.5 -7.0 -9.1 -1.7 -4.4 -5.6 3.0 1.7 12.8 7.0 Commodity-exporting EMDE -24.2 -9.1 -27.1 14.8 5.7 29.3 -16.9 -14.3 -12.1 -13.2 -15.1 -1.9 -1.8 -5.6 7.8 8.3 27.2 20.1 Other EMDE -3.7 -4.6 -20.4 9.3 -0.7 10.2 3.7 -3.2 -4.6 -3.1 -5.6 -1.0 -4.9 -5.0 1.8 -0.4 7.9 2.5 East Asia and Pacific -3.5 -6.1 -24.3 10.1 -0.7 11.0 5.0 -4.9 -6.1 -5.4 -6.9 -1.7 -6.8 -5.8 1.7 -2.1 9.3 2.6 Europe and Central Asia -20.7 -6.1 -19.2 18.3 -0.3 20.4 -13.2 -8.0 -10.6 -4.2 -8.8 0.5 -1.1 -3.6 6.5 7.7 22.1 12.8 Latin America and Caribbean -11.9 -2.4 -5.8 6.0 7.6 15.1 -9.4 -5.4 -2.0 -8.0 -7.6 2.6 2.8 -4.5 10.2 11.1 14.7 12.5 Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - South Asia -4.8 1.7 5.5 4.4 -18.0 33.1 -0.2 1.2 -0.3 5.1 -4.0 5.8 -3.2 10.7 3.4 0.2 2.4 1.9 Sub-Saharan Africa -27.3 -13.2 -40.1 30.4 -10.3 39.6 -21.7 -12.8 -13.3 -14.6 -21.3 -13.0 -3.4 -10.4 2.2 7.0 - - Imports, Nominal, US$, sa World -6.8 -5.3 -23.6 15.9 -16.3 21.0 -9.1 4.2 -4.2 -4.4 -10.9 -6.9 -5.7 -9.7 3.5 -1.7 11.5 5.6 Advanced Economies -12.5 -3.4 -8.8 8.1 -2.4 1.7 -6.6 -4.0 -1.9 -4.6 -8.1 1.7 -1.9 -5.0 2.3 1.1 9.3 3.5 Emerging Market and Developing Economies -3.3 -6.4 -30.9 20.7 -23.8 34.3 -10.5 9.1 -5.5 -4.3 -12.4 -11.6 -7.9 -12.2 4.3 -3.3 12.8 6.9 Commodity-exporting EMDE -0.9 -7.2 -33.2 22.2 -30.1 39.3 -11.6 14.0 -6.8 -4.0 -12.8 -15.6 -9.9 -15.0 4.2 -5.3 12.1 - Other EMDE -11.5 -3.5 -21.0 15.4 2.9 18.5 -6.3 -7.7 -0.7 -5.7 -11.3 3.5 -0.2 -0.5 5.1 3.5 15.5 23.5 East Asia and Pacific -13.1 -3.8 -24.0 16.8 6.6 21.2 -5.3 -8.5 0.4 -6.8 -10.9 5.6 -0.1 -0.8 5.9 5.2 17.1 33.6 Europe and Central Asia -20.8 -1.3 1.5 12.4 -2.9 6.9 -3.8 -3.6 -0.7 0.3 -9.6 8.9 1.5 0.8 5.9 6.4 20.9 8.1 Latin America and Caribbean -9.8 -7.4 -15.6 4.8 4.1 4.1 -14.7 -9.7 -6.2 -8.8 -15.5 1.6 -3.3 -8.5 1.5 3.9 11.2 5.0 Middle East and North Africa 1.5 - - - - - - - - - - - - - - - - - South Asia -13.2 -5.4 -27.6 6.1 10.9 51.4 -18.4 -17.9 -8.5 -5.9 -13.8 -9.1 1.1 7.9 10.2 2.2 14.8 23.3 Sub-Saharan Africa -7.4 - - - - - - - - - - - - - - - - - 1 International Reserves, US$ World -5.9 -1.1 0.7 0.8 0.4 -3.3 1.0 0.7 -0.7 0.8 0.3 -0.1 0.2 -1.1 -1.7 -0.6 0.7 0.2 Advanced Economies 0.6 4.4 3.7 1.7 1.4 -2.5 1.5 1.0 -0.6 1.4 0.5 0.1 0.9 -0.7 -1.5 -0.2 1.5 0.1 Emerging Market and Developing Economies -9.9 -4.8 -1.2 0.2 -0.2 -3.9 0.8 0.5 -0.8 0.5 0.2 -0.2 -0.2 -1.4 -1.8 -0.9 0.1 0.2 Commodity-exporting EMDE -11.1 - -1.0 -0.7 -0.2 - 0.6 0.3 -0.9 0.0 0.4 -0.5 -0.1 -1.7 -1.1 - - - Other EMDE -9.1 -5.7 -1.2 0.7 -0.3 -4.5 0.9 0.7 -0.8 0.7 0.1 -0.1 -0.2 -1.2 -2.1 -1.2 0.0 0.2 East Asia and Pacific -11.3 -7.3 -1.8 0.3 -0.7 -4.9 0.7 0.5 -1.0 0.9 0.0 -0.3 -0.4 -1.3 -2.4 -1.2 -0.1 0.4 Europe and Central Asia -6.3 4.4 4.1 2.7 1.2 -3.9 1.6 1.5 -0.2 1.4 0.5 0.5 0.3 -0.8 -1.7 -1.4 2.1 0.4 Latin America and Caribbean -5.3 1.1 0.1 0.7 1.6 -0.9 0.7 0.8 -0.2 0.1 1.6 0.0 -0.1 -0.6 -0.6 0.1 0.5 0.4 Middle East and North Africa -17.1 - -3.6 -2.6 -2.0 - -0.1 -0.5 -0.8 -1.3 -0.7 -0.8 -0.5 -2.6 - - - - South Asia 11.6 3.5 1.0 2.0 3.3 -2.8 2.3 1.9 -0.8 0.8 1.4 0.6 1.4 -1.0 -0.9 -0.9 -0.1 0.5 Sub-Saharan Africa -12.0 - -2.0 -1.9 - - 0.9 0.4 -1.7 - - - - - - - - - 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. 9 April 2017 TABLE D: Financial Markets (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 2016 2017 MRV 1 2015 2016 Q1 Q2 Q3 Q4 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.37 0.37 0.39 0.45 0.37 0.36 0.38 0.39 0.40 0.40 0.41 0.41 0.55 0.66 0.66 0.79 0.91 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 0.62 0.64 0.79 0.92 0.63 0.65 0.65 0.70 0.81 0.85 0.88 0.91 0.98 1.03 1.04 1.13 1.16 EURIBOR 3- -0.02 -0.26 -0.19 -0.26 -0.30 -0.31 -0.25 -0.26 -0.27 -0.29 -0.30 -0.30 -0.31 -0.31 -0.32 -0.33 -0.33 -0.33 -0.33 US 10-yr Treasury yield 2.12 1.84 1.92 1.75 1.56 2.12 1.79 1.80 1.64 1.48 1.56 1.63 1.74 2.12 2.50 2.44 2.42 2.47 2.18 German Bund, 10 0.54 0.14 0.32 0.12 -0.07 0.18 0.17 0.16 0.01 -0.09 -0.07 -0.05 0.03 0.22 0.30 0.34 0.32 0.39 0.16 Spreads (basis points) JP Morgan Emerging Markets 415 410 478 419 372 369 421 418 418 387 367 361 357 380 370 354 338 329 335 Asia 224 221 264 227 197 197 224 223 233 210 190 191 192 201 198 185 173 166 178 Europe 348 302 339 305 282 283 308 305 303 290 282 273 274 294 282 272 258 253 254 Latin America & Caribbean 540 537 645 551 477 475 559 552 541 496 473 463 453 491 481 463 442 431 434 Middle East 456 517 555 538 508 467 539 530 545 540 492 493 487 475 438 416 396 377 357 Africa 415 518 626 548 461 436 546 552 546 494 448 440 441 444 422 401 387 380 404 Stock Indices (end of period) Global (MSCI) 399 424 395 399 418 424 403 403 399 414 417 418 413 413 424 433 445 449 445 Advanced Economies ($ Index) 1663 1761 1638 1653 1726 1761 1671 1675 1653 1713 1720 1726 1697 1712 1761 1792 1839 1854 1835 United States (S&P 500) 2044 2258 2051 2099 2168 2258 2065 2097 2099 2170 2171 2168 2139 2199 2258 2279 2364 2363 2338 Europe (S&P Euro 350) 1474 1475 1352 1339 1388 1475 1379 1399 1339 1376 1390 1388 1377 1388 1475 1463 1501 1547 1525 Japan (Nikkei 225) 18817 19302 16555 15576 16450 19302 16407 17235 15576 16556 16887 16450 17050 18604 19302 19035 19342 18909 18432 Emerging Market and Developing Economies (MSCI) 794 861 821 834 903 861 840 807 834 879 894 903 908 863 861 909 936 958 953 EM Asia 404 419 404 407 448 419 405 400 407 431 442 448 444 426 419 443 459 474 470 EM Europe 244 295 272 265 273 295 288 268 265 264 269 273 274 273 295 302 296 301 298 EM Europe & Middle East 211 248 230 225 233 248 243 225 225 227 232 233 232 230 248 253 249 252 249 EM Latin America & Caribbean 1830 2341 2121 2269 2381 2341 2292 2038 2269 2359 2402 2381 2608 2330 2341 2516 2600 2611 2604 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.91 0.89 0.90 0.93 0.88 0.89 0.89 0.90 0.89 0.89 0.91 0.93 0.95 0.94 0.94 0.94 0.93 Japan 121.00 108.8 115.23 107.96 102.36 109.63 109.57 108.97 105.34 104.09 101.31 101.69 103.72 108.90 116.28 115.03 112.96 112.91 108.59 Emerging and Developing Economies Brazil 3.33 3.49 3.91 3.51 3.25 3.28 3.56 3.54 3.42 3.28 3.21 3.25 3.18 3.33 3.35 3.20 3.10 3.13 3.11 China 6.29 6.65 6.54 6.53 6.67 6.84 6.48 6.53 6.59 6.68 6.65 6.67 6.74 6.85 6.92 6.89 6.87 6.90 6.88 Egypt 7.70 10.12 8.04 8.87 8.87 14.71 8.87 8.86 8.87 8.87 8.87 8.88 9.25 16.34 18.56 18.68 17.01 17.76 18.09 India 64.14 67.19 67.50 66.91 66.94 67.39 66.49 66.93 67.29 67.18 66.91 66.74 66.73 67.60 67.86 68.06 67.01 65.83 64.63 Russia 61.34 67.06 74.84 65.84 64.61 62.95 66.54 65.96 65.01 64.43 64.93 64.48 62.57 64.25 62.03 59.76 58.42 57.83 56.24 South Africa 12.77 14.71 15.83 15.01 14.07 13.92 14.62 15.36 15.05 14.40 13.79 14.01 13.92 13.96 13.88 13.60 13.17 12.95 13.30 Memo: U.S. nominal effective rate (index) 114.7 119.7 120.3 117.5 118.4 122.5 116.5 117.8 118.2 118.9 117.8 118.6 119.7 122.9 124.9 124.8 123.0 122.5 121.1 1 MRV = Most Recent Value. TABLE E: Commodity Prices 2016 2016 2017 MRV 1 2015 2016 Q1 Q2 Q3 Q4 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Energy 2 65 55 43 56 57 64 51 57 59 57 58 58 64 59 68 69 69 65 65 Non-energy 2 82 80 76 81 82 83 80 81 83 82 82 81 81 83 84 85 87 85 85 Agriculture 2 89 89 85 91 91 90 88 91 94 92 91 90 90 90 89 91 91 89 89 2 Metals and minerals 68 64 59 62 64 71 63 61 61 64 65 64 65 73 75 76 79 79 71 Memo items: Crude oil, average ($/bbl) 51 43 33 45 45 49 41 46 48 44 45 45 49 45 53 54 54 51 53 Gold ($/toz) 1161 1249 1181 1260 1334 1221 1242 1261 1276 1337 1340 1327 1267 1238 1157 1192 1234 1231 1231 Baltic Dry Index 711 676 363 613 736 994 608 623 608 707 675 826 870 1080 1031 913 760 1142 1294 Source: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg 1 MRV = Most Recent Value. 2 Indexes, 2010 = 100. © 2017 International Bank for Reconstruction and Development / e World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved is work is a product of the sta of e World Bank with external contributions. e ndings, interpretations, and conclusions expressed in this work do not necessarily re ect the views of e World Bank, its Board of Executive Directors, or the governments they represent. e maps were produced by the Map Design Unit of e World Bank. e World Bank does not guarantee the accuracy of the data included in this work. e boundaries, colors, denominations, and other information shown on these maps do not imply, on the part of e World Bank Group, any judgment on the legal status of any territory, or any endorse- ment or acceptance of such boundaries. 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