EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) 88628 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Note: Page numbers still need to be revised FIGURE 1.1 Despite some Q1 weakening, business sentiment in Europe and the US signals further expansion FIGURE 1.2 Economic activity is strengthening from very weak levels in Europe FIGURE 1.3 Inflation and unemployment trends are on divergent paths across the major economies Net capital flows and net financial exposures (width of arrows proportional to amounts in bil- FIGURE B1.1.1 lions of U.S. dollars) FIGURE 1.4 Developing country activity is strengthening but at a modest pace FIGURE 1.5 Manufacturing surveys are pointing to continued expansion in East Asia and South Asia FIGURE 1.6 Output gaps remain small in most developing regions FIGURE 1.7 Capital flows have recovered strongly after a steep fall in February Currency depreciations were more modest during the winter turmoil among countries that re- FIGURE B1.3.1 duced external imbalances FIGURE B1.3.2 Distribution of changes in developing country bilateral exchange rates with the US$ FIGURE 1.8 Most developing country equity markets have fully recouped losses since mid -2013 FIGURE 1.9 Borrowing costs have fallen since the start of the year for developing countries FIGURE 1.10 Metal prices have extended their falls while food prices have turned up FIGURE 1.11 Commodity exporters have suffered significant terms of trade losses over the past year FIGURE 1.12 If 2014 is an El Niño year, global grain yields could suffer, pushing up prices FIGURE 1.13 The contribution of high income countries to global trade volumes will more than double FIGURE B1.4.1 China is a major export destination for many developing countries FIGURE B1.4.2 Growth in East Asia has remained robust despite a slowing in China, its main trading partner FIGURE B1.8.1 Default risks had increased sharply in both Ukraine and Russia, but have come down in recent months A prolonged bout of risk aversion linked to the Ukraine crisis could severely dent capital flows FIGURE B1.8.2 and developing country GDP As and when global financial conditions tighten, developing country bond spreads could in- FIGURE 1.14 crease significantly for some Countries with large funding needs and low reserve cover may be most vulnerable to a tightening FIGURE 1.15 of financial conditions Weak imports have helped improve trade defi-cits in countries that felt significant financial FIGURE 1.16 market pressure in mid-2013 FIGURE 1.17 Foreign ownership of local government bond markets has risen sharply in recent years FIGURE 1.18 Debt issuance in international markets has increased, mainly led by corporates FIGURE 1.19 Credit growth is slowing but past buildups still pose risks FIGURE 1.20 Despite recent rate hikes real interest rates remain low in many countries FIGURE 1.21 Rising inflation in a few large middle-income countries has pushed the aggregate up over time FIGURE 1.22 Influenced by commodity prices, inflation in low-income countries has eased FIGURE 1.23 Inflation has accelerated in some countries and remains above target FIGURE 1.24 Actual and structural fiscal deficits are much higher than in 2007 in developing countries FIGURE 1.25 Debt rose by more than 10 percentage points of GDP half of developing countries With currency depreciations unwinding inflation pressures should begin to ease in the second FIGURE B1.9.1 half of the year, all else equal ii EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Note: Page numbers still need to be revised A 10 percent NEER depreciation causes a 3 percentage points increase in median inflation in FIGURE B1.9.2 developing countries after 12 months A 10 percent NEER depreciation causes a 3 percentage points increase in median inflation in FIGURE B1.9.3 developing countries after 12 months FIGURE 2.1 Growth in East Asia has remained broadly unchanged despite a slowdown in China FIGURE 2.2 Policy and administrative tightening is helping to slow credit growth in the region FIGURE 2.3 Decline in domestic demand led to easing of demand for imports FIGURE 2.4 Despite some rebound, asset prices remain around or below early-2013 levels FIGURE 2.5 Sovereign bond yields have narrowed recently FIGURE 2.6 Large stocks of private sector debt represent the sources of financial vulnerability FIGURE 2.7 Growth in the developing Europe and Central Asia region continues to strengthen FIGURE 2.8 Growth in developing Central and Eastern Europe has been export -driven FIGURE 2.9 Growth in developing Central and Eastern Europe has been export -driven Developing Commonwealth of Independent States are exposed to slowing Russia and declining FIGURE 2.10 commodity prices FIGURE B2.1.1 Several countries are heavily exposed to Russia and Ukraine via trade links Russia and Ukraine are important sources of remittances in the Commonwealth of Independent FIGURE B2.1.2 States FIGURE B2.1.3 Dependency on imported gas from Russia varies across countries in the region FIGURE 2.11 Regional industrial production has picked up in recent months FIGURE 2.12 Many countries loosened fiscal policy in 2013 FIGURE 2.13 Central bank policy rates have remained low FIGURE 2.14 Regional currencies remain depreciated below mid 2013 levels despite recent appreciation FIGURE 2.15 Inflation pressures are rising in a number of countries FIGURE 2.16 Gross capital flows have rebounded in recent months after sliding in February FIGURE 2.17 GDP growth for oil-importing countries is picking up in 2013Q4 FIGURE 2.18 Industrial production is volatile but exhibiting signs of recovery FIGURE 2.19 Oil production in the developing oil-exporting countries has begun to pick up FIGURE 2.20 Inflation is subsiding in developing countries of the region FIGURE 2.21 Fixed investment growth in India slowed markedly since 2012 FIGURE 2.22 Gross private capital flows to South Asia have strengthened since Q4 2013 FIGURE 2.23 Equity markets in South Asia gained significantly since Q4 2013 FIGURE 2.24 Stressed loans are more than 10 percent of loans in four South Asian countries FIGURE 2.25 Real GDP growth strengthened in Sub-Saharan Africa in 2013 FIGURE 2.26 Inflation eased in the region in 2013 FIGURE 2.27 Non-energy commodity prices fell in 2013 FIGURE 2.28 Sovereign spreads rose sharply in early 2014, but have begun to decline FIGURE S1.1 Inflation decoupling between developing and high-income countries FIGURE S1.2 Upward drift mainly a middle income phenomenon FIGURE S1.3 Distribution of currency changes across developing countries since January 2012 FIGURE S1.4 Countries having seen the largest currency depreciations since 2012 iii EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Note: Page numbers still need to be revised FIGURE S1.5 Model-based pass-through rate: lag structure and dispersion of country estimates FIGURE S1.6 Pass-through rate higher in developing countries, more limited for inflation targeters FIGURE S1.7 Correlation of pass-through rates with inflation/currency trends across developing countries FIGURE S1.8 Estimated effect of currency developments on regional inflation FIGURE S1.9 Exchange rate impact on current inflation (April 2014) across developing countries FIGURE S1.10 Inflation change from 2012 to 2013: actual and model predictions FIGURE S1.11 Outlook for inflation in developing country (exc. China) and main contributing factors FIGURE S1.12 Currency-related pressures still building up in 2014 across most regions FIGURE S1.13 Monetary policy, inflation and recent currency trends across developing countries TABLE 1.1 The global outlook in summary TABLE 1.2 Net financial flows to developing countries ($ billions) Estimated impact of recent improvements in global financing conditions on capital flows to TABLE B1.5.1 developing countries (percentage point difference from January 2014 GEP explained by updat- ed financial market as-sumptions) TABLE B1.6.1 Baseline line impacts from the Ukraine crisis on the global economy TABLE 2.1 Net capital flows to East Asia and the Pacific ($billions) TABLE 2.2 East Asia and the Pacific forecast summary TABLE 2.3 East Asia and the Pacific country forecasts TABLE 2.4 Europe and Central Asia forecast summary TABLE 2.5 Net capital flows to Europe and Central Asia ($billions) TABLE 2.6 Europe and Central Asia country forecasts TABLE 2.7 Latin America and the Caribbean forecast summary TABLE 2.8 Net capital flows to Latin America and the Caribbean ($billions) TABLE 2.9 Latin America and the Caribbean country forecasts TABLE 2.10 Net capital flows to Middle East and North Africa ($ billions) TABLE 2.11 Middle East and North Africa forecast summary TABLE 2.12 Middle East and North Africa country forecasts TABLE 2.13 Net capital flows to South Asia ($ billions) TABLE 2.14 South Asia forecast summary TABLE 2.15 South Asia country forecasts TABLE 2.16 Net capital flows to Sub-Saharan Africa ($billions) TABLE 2.17 Sub-Saharan Africa forecast summary iv EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Note: Page numbers still need to be revised TABLE 2.18 Sub-Saharan Africa country forecasts TABLE S1.1 Main regression results for high income countries TABLE S1.2 Main regression results for developing countries TABLE A1.1 GDP growth TABLE A1.2 Current account balance TABLE A1.3 Government consumption growth TABLE A1.4 Private consumption growth TABLE A1.5 Fixed investment growth TABLE A1.6 Trade TABLE A1.7 Exports TABLE A1.8 GDP gap and potential growth TABLE A1.9 Merchandise import growth TABLE A1.10 Merchandise export growth TABLE A1.11 Industrial production growth TABLE A1.12 Inflation TABLE A1.13 Unemployment TABLE A1.14 Total reserves in terms of merchandise imports TABLE A1.15 Commodity price indices Monetary easing in the Euro Area could have significant positive trade and financial spillovers, BOX 1.1 but may also expose currency mismatches in some countries BOX 1.2 Recent regional economic developments Exchange rate pressure during the January/February turmoil episode has been less pro- BOX 1.3 nounced than earlier episodes Stronger high-income import demand should more than offset the influence of slower Chinese BOX 1.4 growth BOX 1.5 Recent improvements in global financing conditions and capital flow projections Trade spillovers from the ongoing tensions in Ukraine and Russia are slowing the recovery in BOX 1.6 Europe and Central Asia BOX 1.7 Regional Economic Outlook A severe escalation of tensions in Ukraine could lead to sharp capital outflows from developing BOX 1.8 countries and set back growth BOX 1.9 Exchange rate pass-through to domestic inflation in developing countries BOX 2.1 Ukraine crisis and impact on the ECA region BOX 2.2 New GDP figures show that Nigeria’s economy is almost twice as big as previously estimated v EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) vi EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) vii EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Overview and main messages recovered from the crisis and growing at close to poten- tial. Moreover, in the medium-term, global financial con- ditions will tighten. However, given substantial further credit easing in the Euro Area, when that tightening will The global economy got off to a bumpy start this year occur has become less certain. Other factors arguing buffeted by poor weather in the United States, financial against a more buoyant acceleration include restructuring market turbulence and the conflict in the Ukraine. As a in China, a gradual move towards a more neutral policy result, global growth projections for 2014 as a whole stance in developing countries and, for commodity ex- have been marked down from 3.2 percent in January to porters, stable or even declining commodity prices. 2.8 percent now. Despite the early weakness, growth is expected to pick up speed as the year progresses and Regional prospects vary world GDP is projected to expand by 3.4 percent in 2015 and 3.5 percent in 2016 – broadly in line with earlier fore- Supply-side bottlenecks will preclude stronger growth, casts (table 1.1). When expressed in 2010 Purchasing particularly in East Asia and the Pacific; Latin America Power Parity terms, global growth is projected to acceler- and the Caribbean; and Sub-Saharan Africa. Most econo- ate from 3.1 percent in 2013 to 3.4, 4.0, and 4.2 percent mies in these regions have already completely recovered in each of 2014, 2015 and 2016. from the financial crisis and are growing at close to po- tential. Growth in East Asia is projected to slow modest- High-income country recovery is underway ly to 7.0 percent by 2016. Most countries in Latin Ameri- ca are operating at full capacity, but strengthening output The bulk of the acceleration will come from high-income in Argentina, Brazil and Mexico is projected to lift re- countries (notably the U.S. and the Euro Area). A re- gional growth from a weak 1.9 percent this year to duced drag on growth from fiscal consolidation, improv- around 3.5 percent in 2016. In Sub-Saharan Africa GDP ing labor market conditions and a steady release of pent- growth is projected to gradually firm toward 5.1 percent up demand in these countries are projected to overcome in 2016 from a broadly flat 4.7 percent in 2014. first quarter softness and lift high-income GDP growth to 1.9 percent in 2014, from 1.3 percent in 2013, and to In Europe and Central Asia outturns will be affected by the 2.4 and 2.5 percent in 2015 and 2016. conflict in Ukraine. Growth for developing countries in the region is projected to drop from 3.6 percent in 2013 to 2.4 Developing country growth to pickup slowly, as tail- percent this year, before firming to 3.7 and 4.0 percent in winds from stronger high-income growth are countered 2015 and 2016. For the broader geographic region (including by capacity constraints and an eventual tightening of high-income countries such as Russia, Poland and other Bal- financial conditions tic economies) growth is projected to gradually firm from a low of 1.7 percent in 2014 to 3.2 percent in 2016. The outlook for developing countries is for flat growth in 2014. This marks the third year in a row of sub-5 percent In the Middle-East and North Africa, and in South Asia growth and reflects a more challenging post-crisis global growth is expected to pick up more brusquely. In South economic environment. The flat yearly profile masks an Asia the acceleration is expected to be focused in India, as expected firming of activity during the course of 2014, reforms are undertaken to ease supply side constraints, with developing country growth reaching 5.4 and 5.5 per- particularly in energy and infrastructure. Regional growth is cent in 2015 and 2016 — broadly in line with potential. projected to firm from 4.7 percent in 2013, to 5.3, 5.9 and 6.3 percent in 2014, 2015, and 201616 respectively. In the The outlook reflects countervailing forces. On the one Middle-East the projected rebound is more gradual, from hand, the high-income acceleration will supply an im- stagnation last year, to growth of 1.9, 3.6 and 3.5 percent in portant tailwind, with their contribution to global growth each of 2014, 2015 and 2016 reflecting rising oil output in expected to rise from less than 40 percent in 2013 to Iran and Iraq, and a partial recovery in Egypt and Jordan nearly 50 percent in 2015. As a result, high-income im- from the conflict-generated lows of recent years. port demand is projected to accelerate from 1.9 percent growth last year to 4.2 percent in 2014 and as much as Global risks have declined but prospects remain sensitive 5.0 percent in 2016, and developing country exports to volatility in financial markets from 3.7 percent last year to 6.6 percent by 2016. High-income country based tail risks to the global econo- Developing country growth will not be more robust in my have been largely eliminated, reflecting the substantial part because most developing economies are already fully restructuring that has already occurred in both Europe 3 Table 1.1 The global outlook in summary (percentage change from previous year, except interest rates and oil price) 2012 2013e 2014f 2015f 2016f GLOBAL CONDITIONS World trade volume (GNFS) 2.7 2.6 4.1 5.2 5.4 CPI inflation, G-7 Countries1,2 1.8 1.3 1.8 1.9 2.0 CPI inflation, United States 2.1 1.5 1.7 2.0 2.2 Non-oil commodity price in USD -8.6 -7.2 -2.5 -0.6 0.1 Oil price (US$ per barrel)3 105.0 104.1 102.8 99.3 98.1 Oil price (percent change) 1.0 -0.9 -1.2 -3.4 -1.2 Manufactures unit export value4 -1.2 -1.4 0.5 2.2 1.4 USA 6-month LIBOR interest rate (percent) 0.7 0.4 0.4 0.7 1.3 Euro Area 6-month LIBOR interest rate (percent) 0.8 0.3 0.2 0.2 0.5 International capital flows to developing countries (% of GDP)5 Developing countries Net capital inflows 5.2 5.6 5.6 5.4 5.1 East Asia and Pacific 4.8 6.1 5.9 5.4 5.0 Europe and Central Asia 7.3 6.9 8.0 8.4 8.0 Latin America and Caribbean 5.4 5.9 5.8 5.8 5.5 Middle East and North Africa 2.3 2.2 1.7 1.8 1.8 South Asia 5.6 3.9 4.5 4.5 4.4 Sub-Saharan Africa 6.4 5.8 5.2 5.3 5.4 REAL GDP GROWTH 6 World 2.5 2.4 2.8 3.4 3.5 Memo item: World (2010 PPP weights) 3.2 3.1 3.4 4.0 4.2 High income 1.5 1.3 1.9 2.4 2.5 OECD countries 1.3 1.2 1.8 2.4 2.5 Euro Area -0.6 -0.4 1.1 1.8 1.9 Japan 1.4 1.5 1.3 1.3 1.5 United States 2.8 1.9 2.1 3.0 3.0 Non-OECD countries 3.4 2.5 2.4 2.9 3.4 Developing countries 4.8 4.8 4.8 5.4 5.5 East Asia and Pacific 7.4 7.2 7.1 7.1 7.0 China 7.7 7.7 7.6 7.5 7.4 Indonesia 6.3 5.8 5.3 5.6 5.6 Thailand 6.5 2.9 2.5 4.5 4.5 Europe and Central Asia 1.9 3.6 2.4 3.7 4.0 Kazakhstan 5.0 6.0 5.1 5.9 6.0 Turkey 2.1 4.0 2.4 3.5 3.9 Romania 0.4 3.5 2.8 3.2 2.9 Latin America and Caribbean 2.6 2.4 1.9 2.9 3.5 Brazil 0.9 2.3 1.5 2.7 3.1 Mexico 4.0 1.1 2.3 3.5 4.0 Argentina7 0.9 3.0 0.0 1.5 2.8 Middle East and North Africa 0.6 -0.1 1.9 3.6 3.5 Egypt8 2.2 2.1 2.4 2.9 3.2 Iran -5.6 -1.7 1.5 2.0 2.3 Algeria 3.3 2.7 3.3 3.5 3.6 South Asia 5.0 4.7 5.3 5.9 6.3 India8,9 4.5 4.7 5.5 6.3 6.6 Pakistan8,9 3.8 3.7 3.7 3.9 4.0 Bangladesh8 6.2 6.0 5.4 5.9 6.2 Sub-Saharan Africa 3.7 4.7 4.7 5.1 5.1 South Africa 2.5 1.9 2.0 3.0 3.5 Nigeria 6.5 7.0 6.7 6.5 6.1 Angola 6.8 4.1 5.2 6.5 6.8 MEMORANDUM ITEMS Broader geographic region incl. recently high-income countries Europe and Central Asia 2.3 2.2 1.7 2.7 3.2 Latin America and Caribbean 2.8 2.5 1.9 3.0 3.5 Middle East and North Africa 2.2 1.4 2.7 3.8 3.8 Sub-Saharan Africa 3.6 4.6 4.6 5.0 5.0 Developing countries excluding China and India 2.8 3.2 2.9 3.8 4.1 Source: World Bank. Notes: PPP = purchasing power parity; e = estimate; f = forecast. 1. Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. 2. In local currency, aggregated using 2010 GDP weights. 3. Simple average of Dubai, Brent, and West Texas Intermediate. 4. Unit value index of manufactured exports from major economies, expressed in USD. 5. This edition of Global Economic Prospects introduces a new methodology for measuring international capital flows based more closely on the definitions implemented in the sixth edition of the IMF's Balance of Payments Manual. Using this methodology, capital flows to developing countries are about 0.5 percentage points higher than those reported in earlier editions of GEP, which combined data from the earlier version 5 of the Balance of Payments and the World Bank's International Debt Statistics. 6. Aggregate growth rates calculated using constant 2010 dollars GDP weights. 7. Data was recently rebased; missing data up to 2003 was spliced with the earlier series. 8. In keeping with national practice, data for Bangladesh, Egypt, India, and Pakistan are reported on a fiscal year basis in table 1.1. Aggregates that depend on these countries are calculated using data compiled on a calendar year basis. 9. Real GDP at factor cost, consistent with reporting practice in Pakistan and India. EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook and the US — although more needs to be done. High- Fiscal conditions in developing countries considered as a income challenges and risks are increasingly of a medium group are not worrisome, although exceptions exist. term nature including those related to fiscal sustainability While policy adjustment has started to reduce risks in challenges and an orderly exit from unconventional mon- some countries, fiscal balances have deteriorated substan- etary policy (Europe, US and Japan), deflation risks (in tially since 2007, and, despite solid growth, debt levels Europe) and the need for structural reforms to boost have increased by 10 or more percent of GDP in more productivity growth. Short-term risks are less pressing than half of developing countries. and more balanced than before. In those middle-income countries that combine high Among developing countries, short-term risks have also inflation, and elevated current account deficits the become less pressing, partly because earlier downside need to tighten macro policy is clear — especially risks have been realized over the past year without gener- where real interest rates are close to zero. Else- ating large upheavals, and because the economic adjust- where, the argument for a gradual tightening of poli- ments over the past year have reduced vulnerabilities. For cy is more prudential in nature. Many countries example, the depreciations endured and interest rate would be well advised to rebuild fiscal buffers by hikes and other policy measures imposed since the sum- slowly reducing deficits, especially in a medium-term mer of 2013 narrowed current account deficits and environment where debt-servicing costs are likely to slowed credit growth in subsequent months in several of rise, and, in the case of commodity exporters, gov- the countries hardest hit in the summer (India, South ernment revenues are likely to weaken. While credit Africa, and Thailand). growth is slowing, domestic financial risks remain, notably in South Asia and developing Europe and In contrast, domestic price and wage pressures remain Central Asia where non-performing loans are an strong and current account deficits high in Brazil and ongoing concern. Turkey. While supportive in the short term, the fall in developing country yields since April could exacerbate Medium-term growth will have to come from structural underlying vulnerabilities that persist in several econo- reforms that boost growth potential mies if domestic credit and demand start to expand too rapidly in response to increased financial inflows. Height- In a world where external financial conditions are ex- ened risks in one or more of these economies could pected to tighten and remain challenging, future growth spark contagion to other countries. must increasingly be driven by domestic efforts to boost productivity and competitiveness. Developing countries The baseline assumes that tensions in Ukraine will persist have shown their ability to prosper even as high-income this year without escalating further. However, if they country growth and imports weakened, but to continue escalate, they could deeply shake global confidence, caus- to do so they will need to reinvigorate domestic reforms ing firms and households to cut back on spending and that have taken a backseat to fire-fighting and demand generating a slowdown of 1 or more percentage points of management in the post-crisis period. GDP in developing countries. Ambitious and advanced reform agendas in some coun- Over the medium-term macroeconomic policy needs to tries (China, Mexico and the Philippines) and past re- tighten in order to increase resilience and, in some forms in others (Colombia and Peru) are enabling these countries, alleviate inflationary pressures countries to better navigate global financial headwinds. While smooth adjustment to the normalization of mone- The reform plans announced since November of last tary policy in high income countries remains the most year demonstrate China’s commitment to improving likely scenario, markets remain skittish. Further episodes resource allocation and increasing the role of market of volatility can be anticipated as markets speculate over forces in the economy. But rebalancing the economy, the timing and magnitude of shifts in macro policy. while minimizing financial instability as credit growth slows and financial reforms are implemented, is a How well developing countries will be able to navigate formidable task. Growth in house prices has moderat- further episodes of volatility will depend on the strength ed as home sales and property construction have fall- of domestic economies and the amount of policy space en, pointing to the real-estate market and associated available to counter shocks. Today’s easy global financial lending as an area of growing concern. Any hard land- conditions provide a (short) window of opportunity to ing could have substantial spillovers within East Asia, put domestic economies in order. and to commodity exporters. 5 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Recent developments inventories. Despite the weakness, more than half a mil- lion jobs were added in Q1, with current trends implying that some 2.6 million jobs will be added this year, the most since 1999. This, coupled with reduced fiscal drag, High income country growth softened in the first rising household incomes and wealth (stocks are up some 32 percent since the start of 2013) is boosting demand, quarter but appears to be firming business productivity, investment and hiring – and is expected to lead to even stronger growth. With delever- More than five years into a painfully slow recovery, high aging at an end, consumer lending is also growing at the income economies are stirring back into life. Idiosyncrat- same pace as in pre-crisis years. Surveys indicate a strong ic factors, including weather conditions, have weighed on pick up in the second half of the year in business invest- growth in Q1. But in the three major high-income re- ment, which has so far lagged the recovery. gions – the US, Euro Area and Japan – there are indica- tions that private spending is beginning to heal, helped by Nevertheless, although the short-term environment is improvements in job markets and progress with balance much improved, medium-term challenges remain. Little sheet adjustments which, in the case of the US, have progress has been made to bring fiscal policy back to a drawn to a close. In the Euro Area and the United States sustainable path, and, although unemployment is down, a significant easing in the pace of fiscal consolidation is participation rates are at record lows raising concerns that contributing to the pickup in demand, and business con- workers may suffer from de-skilling and permanent labor fidence in both remains high (figure 1.1). market-scarring. Traditional monetary policy in all three economies re- The recovery in the Euro Area remains hesitant mains very loose, though the United States is slowly re- ducing the scope of its quantitative easing program. In Growth has meanwhile remained tepid in the Euro Area Japan, quantitative easing measures have intensified, following its exit from recession in 2013Q1, with the while further steps were recently taken in the Euro Area currency union growing at a 0.8 percent annualized pace to combat the risk of deflation. in Q1 (figure 1.2). In part, the data reflect genuine eco- nomic fragility—Portugal’s and Italy’s economies con- Bad weather temporarily slowed the US recovery tracted after pulling out of recession during 2013. But data has also been noisy, reflecting one-off factors that Incoming data in the US suggest that the economy is should fade over time, including unusually strong con- rebounding strongly after contracting for the first time in traction in gas production in the Netherlands due to three years in Q1, when abnormally cold weather cur- warm weather, that led to a contraction in GDP, and a tailed investment and exports, while firms cut back on VAT increase in France that undermined consumption. Figure 1.1 Despite some Q1 weakening, business sentiment Figure 1.2 Economic activity is strengthening from very in Europe and the US signals further expansion weak levels in Europe GDP q/q saar, % 4 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 3 Sep-13 Dec-13 Mar-14 2 1 0 -1 -2 -3 -4 UK Euro Area Euro Area: High France Germany Spread* Source: World Bank, Haver Analytics. High-spread countries comprise Source: World Bank, Markit Economics. Italy, Greece, Portugal, Ireland and Spain. 6 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Importantly, soft Q1 data mask signs of strength in Ger- alternative source of financing for the corporate sector many, the Euro Area’s largest economy and a key source (ECB, 2013). Persistently low Euro Area-wide inflation of demand for the rest of Europe. Growth in Germany also remains a concern (figure 1.3), complicating the task accelerated to a solid 3.3 percent annualized pace, the of dealing with high public debt burdens and still high strongest in 3 years led by private domestic demand. Eu- levels of private sector indebtedness in some periphery ro Area-wide manufacturing and service PMIs also show economies. As a result, the ECB loosened monetary poli- a broadly-based improvement in activity that is gathering cy substantially in June, via cuts in its benchmark rate and momentum in Q2. a substantial injection of liquidity and credit easing measures including a Targeted Long Term Refinancing The Euro Area is still in the early phases of recovery. GDP operation (TLTRO) in a bid to restore bank lending to and private consumption spending in some periphery households and firms (see box 1.1). economies remain nearly 10 percent below pre-crisis peaks and investment is 40-50 percent lower in Spain, Portugal In Japan, spending in advance of the sales tax increase and Ireland. To date the recovery in the periphery has boosted Q1 growth but will eat into Q2 outturns even as been driven by exports, reflecting competitiveness gains structural reforms get underway earned painfully through weak or even negative wage growth that have brought down unit labor costs. Competi- Japan’s economic cycle remains out of sync with other tiveness gains continue to remain strong, supporting un- high income economies, reflecting domestic policy fac- derlying activity. Encouragingly, there are signs that the tors. The extremely strong acceleration in Q1 GDP (to labor market may be bottoming out, with unemployment 5.9 percent annualized) reflected a one-off front-loading rates throughout the Euro Area beginning to inch down, of demand by consumers before the April sales tax hike, albeit from extremely high levels. Financial conditions and extremely strong business spending which may also have also eased considerably, reflected in the fall in periph- have been influenced by the tax increase. Business confi- ery sovereign debt spreads to pre-crisis lows. dence indicators slid sharply in April but have since slightly recovered, suggesting activity is stabilizing. In addition to substantial progress in restoring fiscal bal- ance within the Euro Area, the establishment of a pan- The structural reform agenda—necessary for boosting European banking supervision regime and bailout rules productivity and potential growth—has begun to ad- represent important achievements. However there is vance. Special economic zones, where business and labor some way to go before full backstop measures are in regulations are to be eased, have been announced cover- place to cope with large-scale banking sector distress. ing 38 percent of economic activity and corporate tax Bank lending also continues to contract, although this reforms are expected to be announced in June, which weakness partly reflects a transition from a loan-based should help boost investment. financing model to increased use of bond markets as an Nevertheless, the near term outlook remains challenging. Fiscal drag from the April tax increase will likely slow growth, although the effects of this will be partially offset Figure 1.3 Inflation and unemployment trends are on by the fiscal and monetary stimulus which is currently divergent paths across the major economies being implemented. Finally, over the medium-term, the Unemployment (deviation from NAIRU**) 4 pace of growth will depend on how successful structural Apr. reforms are in increasing productivity growth and invest- Euro Area 2013 3 ment and in mobilizing labor supply. Apr. 2014 2015Q3* 2 Apr. Apr. 2012 The first quarter in developing countries was Apr. marred by weakness, but there are signs of a 2012 2013 Apr. 1 USA Apr. 2014 Inflation modest strengthening 2012 (deviation from 2% target) 0 -3 Apr. -2 -1 0 2015Q3* 1 Overall economic activity in developing countries slowed 2013 2015Q3* Japan in early 2014 (see box 1.2 and Chapter 2 for a detailed -1 Apr. 2014 summary of recent developments). Developing country Source: World Bank, OECD, ECB, Consensus Economics. *2014 Q3 and 2015Q3 industrial production grew at a 3.7 percent annualized estimates are from Consensus Economics. ** NAIRU refers to non-inflationary rate of pace during the first quarter of 2014 well off the average unemployment: 6.1% in US, 9.1% in Euro Area and 4.3% in Japan. of 7.6 percent between 2000 and 2013. 7 Box 1.1 Monetary easing in the Euro Area could have significant positive trade and financial spillovers, but may also expose currency mismatches in some countries On June 5, the ECB announced further monetary easing (a rate cut that drives deposit rates below zero, a narrowing of the policy rate corri- dor, and targeted liquidity provision) and accelerated preparation for securities purchases. The goal is to prevent persistently low inflation from undermining a sluggish recovery and potentially impairing the effectiveness of monetary policy if low inflation (or deflationary) expecta- tions were to set in. While the targeted liquidity provision differs from the government bond purchases used to implement quantitative eas- ing in the U.S. and Japan, it also expands the central bank balance sheet. In Japan an ambitious program of quantitative easing announced in April 2013 has grown the central bank balance sheet by 15 percentage points to 50 percent of GDP — mostly through the purchase of government bonds. As a result, the Yen depreciated by almost 10 percent and equity markets climbed 23 percent within two months. Spillovers outside Japan (aside from the relative appreciation of trading partner’s curren- cies) have been much smaller despite Japanese investors becoming net sellers of foreign securities in 2013 for the first time since 2005. With its larger and globally more integrated financial system, ECB monetary easing has the potential to create larger spillovers than Japan’s (figure B1.1.1). The ECB’s balance sheet is about one -fifth larger than that of the Bank of Japan; Euro Area BIS -reporting banks’ claims on other countries—especially to countries other than the US and Japan—are two to four times those of US and Japanese banks; and Euro Area portfolio asset holdings abroad (other than in the US and Japan) are almost three times as large as those of Japan. The monetary easing by the ECB would likely support growth, encourage inflation, and at the same time generate depreciation pressures for the euro against other major reserve currencies. This would have global spillovers through three channels:  Rising trade. Although some nominal and real effective depreciation of the euro may weaken competitiveness elsewhere, a faster euro area recovery would increase euro area demand for its trading partners’ exports, lifting growth notably across developing Europe.  Loosening global financial conditions: A decline in real euro area bond yields—assuming the monetary easing is effective—could encourage a search for yield and capital inflows into emerging markets. In countries where the recovery has been sluggish and which have little room for monetary or fiscal stimulus, especially in developing Europe, loosening financial conditions and rising trade would support efforts of domestic policies to stimulate activity, although for countries where a tighter stance is in order the additional external liquidity could be unwelcome and a source of volatility.  A depreciation of the euro could exacerbate currency mismatches in countries that combine significant non-euro-denominated liabil- ities (e.g US dollar or Swiss franc loans) with a bias toward euro area exports. Countries like Hungary and Poland—with a significant share of household mortgages denominated in Swiss francs—and Turkey and Lebanon, with heavy corporate borrowing denominated in U.S. dollars, might be vulnerable to these kinds of pressures. Figure B1.1.1 Net capital flows and net financial exposures (width of arrows proportional to amounts in billions of U.S. dollars) Net inflows of net FDI assets, Net inflows of net portfolio and Foreign claims of BIS reporting International holdings of 2013 other investment assets, 2013 banks, Q4 2013 portfolio assets, 2012 Source: Bilateral balance of payments statistics from BEA, Bank of Japan, and Source: Bilateral foreign claims from the BIS Consolidated Banking Statistics; Eurostat. Portfolio and Other Investment Assets could not be separated for lack bilateral international investment positions from the IMF Consolidated Portfolio of bilateral data. An arrow indicates the direction of net inflows; the darker and Investment Survey. An arrow indicates the direction of the claim from the credi- wider the arrow, the higher the net inflow. tor towards a borrower; the darker and wider the arrow, the higher the claim. 8 Box 1.2 Recent regional economic developments (The regional annexes to this volume contain more detail on recent economic developments and outlook, including country-specific forecasts.) 2013 marked another year of moderating annual growth in the East Asia and the Pacific region mainly due to domestic adjustment aimed at addressing imbalances accumulated during the years of credit -fueled expansion. Regional annual growth eased to 7.2 percent in 2013 with a volatile quarterly profile indicative of the transition to more sustainable growth, global financial t urbulence, and growth supporting measures in China. Continued adjustment in 2014, partly reflecting a moderation of real credit growth from double digit rates, particularly in China, Indonesia and Thailand translated in weak Q1 GDP outcomes across the region. There are signs of a modest rebound in regional activity in Q2 reflecting growth -supporting measures in China, an easing of the adjustment process elsewhere and a pick-up in global import demand. Partly reflecting improvements in external balances and domestic adjust- ment, but also resurgent global risk appetite, pressures on regional asset prices and currencies have eased from the May - September tightening episode and borrowing costs have fallen. A modest recovery in developing Europe and Central Asia remained on track in 2014Q1 despite global financial headwinds in late Janu- ary and the ongoing situation in Ukraine. Industrial output growth accelerated to 12.0 percent annualized in Q1 in the developing Central and Eastern Europe sub-region, notably Hungary and Romania, helped by rising imports to the Euro Area. Activity has slowed among developing Commonwealth of Independent States countries, notably Armenia and Kazakhstan, while the unsettled situation in Ukraine has caused already weak activity to contract sharply. Industrial output growth remained resilient in Turkey in Q1 helped by strong external demand, but momentum has slowed and domestic demand is weakening in the face of higher inflation and past currency weakness. Global financial volatility in late January put several countries under pressure including Hungary, Kazakhstan, Kyrgyz Republic, Turkey, and Ukraine. Gross capital flows to the region halved in February but have since rebounded strongly led by a surge in bond issuance. However overall flows remain 42 percent lower than the same period last year and equity flows remain negligible. The ongoing slowdown in China, volatile global financing conditions, and the extended decline of commodity prices, together with supply-side constraints continue to leave countries in Latin America and Caribbean with subdued growth. Regional growth edged down to 2.4 percent in 2013, with faster growth in South America and the Caribbean being offset by a sharp slowdown in North and Central America. The weakened momentum has spilled over into 2014. Contracting since the end of 2013, regional industrial output is showing hints of a broad-based comeback with growth rates approaching positive territories as recovering capital flows have fueled domestic demand. External demand continues to be weak with regional exports contracting since the beginning of the year on a slowing China and severe weather conditions in the U.S. While inflation across the region is still generally low, weakened ex- change rates have led to modestly higher inflation rates in a handful of countries, prompting tighter monetary policy. However, mon- etary and fiscal policy still remain accommodative in an effort to support growth in many countries in the region. Momentum is recovering in the economies of the Middle East and North Africa region, however the recovery remains weak. After plunging in 2013Q3, industrial production, exports and tourist arrivals have recovered in the oil -importing countries in the region. However, the recovery remains fragile and is yet to be firmly rooted and is not significant enough to reverse the high and growing unemployment. Oil-exporting countries have seen their oil output recover too, albeit not to pre -2011 levels. Political transitions con- tinue to dominate with a number of elections being held in 2014, namely Algeria, Egypt, Tunisia, Iraq, and Lebanon, leaving persis- tent structural problems of high youth unemployment and poor service delivery to be addressed in the future. Meanwhile, fiscal and external balances remain weak, external debt high and capital flows dependent on official financing. Overall, growth is expec ted to pick up to 1.9 percent in 2014, up from a contraction of 0.1 percent in 2013. South Asia’s GDP grew an estimated 4.7 percent in market price terms in 2013, slowing from 5.0 percent the previous year. This relatively weak growth (compared to the region’s past performance) mainly reflects subdued manufacturing activity and a sharp slowing of investment growth in India. India’s exports received a temporary boost from currency depreciation in the second half of 2013, but slowed in Q1 2014. A sharp current account adjustment was achieved mainly through measures to reduce gold imports. In the rest of South Asia, industrial production and exports rose rapidly in the second half of 2013, in line with firming hi gh-income demand, but export growth slowed in the first months of 2014, in part due to local factors. Inflation in the first quarter of 2014 was above 7 percent (y/y) in Bangladesh, Pakistan, India and Nepal, reflecting supply -side bottlenecks and persistence of food price inflation. Despite some consolidation, notably in Pakistan and India, fiscal deficits in the region remain high, in part refl ecting weak revenue mobilization. Energy shortages and a fragile security situation in some countries remain impediments to private sector ac- tivity. Private capital flows to the region have grown steadily since the mid -2013 turmoil, while remittances (despite easing) provided support to consumption and external balances. Economic activity was robust in much of Sub-Saharan Africa in 2013 reflecting strong domestic demand, with GDP growth outturns of 4.7 percent in 2013 vs 3.7 percent in 2012. Growth in South Africa, the region’s second largest economy, slowed to 1.9 percent, hurt by structural bottlenecks, tense labor relations, low investor confidence, and weak external demand. Excluding South Africa, average regional GDP growth was 6.0 percent. Helped by lower international food and fuel prices, regional inflation decelerated to 7.8 percent in 2013 from just over 10 percent in 2012. Fiscal and current account deficits widened across the region, reflecting high government spending, falling commodity prices, and strong import growth. Global financial volatility at the start of the year put pres- sure on currencies and asset markets in South Africa, Ghana, Nigeria and Zambia, with short -term capital inflows falling significant- ly. As financial strains have eased, Zambia undertook Sub -Saharan Africa's first sovereign debt issuance of 2014, raising US$1 billion on 10-year bonds priced at 8.6 percent, compared with a yield of 5.3 percent on its maiden bond issuance in 2012. 9 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Figure 1.4 Developing country activity is strengthening Figure 1.5 Manufacturing surveys are pointing to continued but at a modest pace expansion in East Asia and South Asia Source: World Bank, Markit Economics. Source: World Bank, Haver. Much of the aggregate slowdown reflected weakness in (3m/3m saar) in April, while May PMIs rose to a five- China (figure 1.4). Chinese first quarter GDP expanded month high (figure 1.5), boding well for momentum in at only a 5.8 percent annualized rate with industrial pro- Q2. The improvement follows a strengthening in exports duction decelerating sharply. Among other factors, Chi- and the announcement of a 2.5 percent of GDP growth na’s slowing was due to financial re-regulation designed support package announced in March. Another (modest) to rectify past misallocation of credit. As a result, the package of targeted measures was announced in late May, pace of total aggregate financing is estimated to have which should support sentiment and activity further. That slowed by some 9 percentage points in 2013, with tighter said, there remain concerns that China’s property boom, financing conditions reflected in an increasing frequency which has been a major driver of growth in recent years1, of defaults in bond markets and the shadow banking may be drawing to a close as rising stocks of unsold apart- sector; and rising onshore corporate bond yields. ments, combined with credit tightening put pressure on prices and stall residential investment demand. Weakness was evident elsewhere too. Barring India, Mex- ico and Philippines where GDP growth accelerated Industrial production in the rest of the developing world slightly in Q1, the pace of growth slowed in Indonesia, grew at 2.3 percent in Q1 (after contracting slightly in Q4 Mongolia, Malaysia and Brazil, turned negative in South 2013). Activity has been the strongest in developing Eu- Africa and Peru, while particularly sharp contractions rope and Central Asia despite the turmoil in Ukraine, (between 8-12 percent annualized) occurred in Ukraine, with industrial output rising at a 13 percent pace in Q1, Thailand and Morocco which will affect annual growth boosted by demand in the Euro Area. A deterioration in outturns in these economies. The weakness reflects a business sentiment—reflecting a sharp tightening of poli- combination of factors including knock-on effects from cy during Q1 in Turkey and the confidence effects from the severe winter in the US, political tensions (Thailand, the crisis in Ukraine—suggest that an export-driven re- Ukraine and Turkey), labor unrest (South Africa), capaci- bound in Q1 is fading with PMIs pointing to muted out- ty constraints, declining commodity prices (a negative for put growth going forward. exporters), and monetary policy tightening following last summer’s turmoil all played a role. Industrial output in India expanded at a 3.5 percent an- nualized pace in Q1 after a 4.8 percent contraction in Business sentiment data suggest strengthening activity in 2013Q4, with May PMI surveys indicating further im- Q2 in East Asia and South Asia provements in business conditions albeit at a modest Nonetheless in many developing countries, industrial out- put is beginning to accelerate, often in tandem with export 1. Property investment in China accounts for about 16 percent of GDP by some estimates, and possibly even more. According to estimates by growth. In China there are signs of a tentative turnaround: Moody’s Analytics, the building, sale and outfitting of apartments ac- industrial output growth accelerated to 5.1 percent counted for 23 percent of GDP in 2013. 10 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Figure 1.6 Output gaps remain small in most developing Figure 1.7 Capital flows have recovered strongly after regions a steep fall in February Source: World Bank. Source: World Bank. pace. In East Asia, business confidence in Indonesia has capacity constraints prominent, suggesting limited scope improved as price pressures have stabilized and currency for a sharp acceleration, particularly in East Asia and Latin pressures have eased, and sentiment continues to show America. This is also the case for developing Europe and solid expansion in Vietnam despite the recent unrest. The Central Asia where (negative) gaps have all but closed as outlier is Thailand, where political tensions have caused a the region has recovered from the crisis, and to a lesser sharp slide in industrial output at a 16.5 percent annual- extent in Sub-Saharan Africa due to robust domestic de- ized pace in the three months to April. mand that has powered growth in recent years. In contrast, confidence in Latin America and South Afri- The main exception to this observation is the Middle ca has fallen sharply due to domestic weakness. In Latin East and North Africa where yawning negative gaps be- America, a challenging economic environment and weak tween actual and potential output have continued to ex- domestic demand in Brazil have contributed to the pand amid persistent socio-economic and political ten- downshift in PMIs. Activity is also subdued in Mexico, sions and following substantial disruptions to oil produc- but improving order books suggest that the outlook there tion last year. is improving. Capital flows and risk appetite have recovered Small positive output gaps in most developing from recent volatility regions suggest limited spare capacity After the turmoil that accompanied speculation about the A cyclical deceleration in growth in developing countries end to quantitative easing in the United States, financial to more sustainable rates in recent years and modest markets calmed in the fall of 2013. And the actual begin- monetary tightening over the past year have helped to ning of the taper was greeted with a muted reaction by narrow the large positive output gaps that characterized financial markets, with US long term bond yields actually the immediate post-crisis period (see January 2014 edi- narrowing slightly. tion of Global Economic Prospects and figure 1.6). This has helped unwind excess demand pressures (generated dur- That initial calm was interrupted toward the end of Janu- ing the pre-crisis boom years and by counter-cyclical ary 2014, when equity markets began a broadly-based sell policies in the post-crisis period) that contributed to a -off provoked by a string of adverse news, including build up in external imbalances and domestic vulnerabili- slowing growth and default risk in the shadow-banking ties in several developing countries. sector in China, the devaluation of the Argentine peso and increased political tensions in several middle income Nevertheless, activity continues to grow broadly in line economies. Capital flows to developing countries plum- with potential. As a result, output gaps remain positive and meted 65 percent in February driven mainly by an 80 11 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Box 1.3 Exchange rate pressure during the January/February turmoil episode has been less pronounced than earlier episodes While the January-February episode of financial market volatility followed on the heels of the summer (May– August) 2013 turbu- lence, the nature and causes for the two events were very different. The summer episode was provoked by rising US long -term interest rates, in response to expectations that the Federal Reserve would begin reducing the scope of its quantitative easing toward the end of 2013. The higher return on safe US assets provoked a global portfolio adjustment, with money moving back to the US from elsewhere in response to the near doubling of US Treasury yields, and in turn causing developing country spreads to rise. In contrast, while the volatility of the winter occurred against a backdrop of US tapering, it was provoked by a string of adverse news from developing countries. In the case of the United States, long -term yields actually fell, while those of developing countries were broadly stable — suggesting that market nerves (rather than the taper) were at play. Flight to safety flows were reflected in a global sell-off in equity markets, with both high income and developing country benchmark indices falling by about 6 percent and currency sell-offs in developing countries (figure B1.3.1). A key similarity between the two episodes was that while many countries depreciated against the USD, the majority of depreciations were minor. In nominal effective terms the majority of developing -country currencies in both episodes actually appreciated. Indeed, compared with previous periods of significant U.S. dollar appreciation (more than 1.8 percent in effective exchange rate terms) since 2000, currency pressures across developing countries were somewhat less pronounced during both the June 2013 and January 2014 events. Both the median depreciation and the proportion of extreme developments were smaller than during earlier episodes (figure B1. 3.2). The impression of a more significant sell-off reflected the fact that several large middle -income economies were among those hard- est hit, notably in mid-2013 (Indonesia, India, Brazil, Turkey, and South Africa) in part because they had liquid financial markets and significant external financing needs during that summer episode of financial market volatility. Moreover, not only were currency pressures less pronounced in the winter, they were more narrowly distributed – partly because of the economic and policy adjustments that occurred after the summer exchange rate pressure: earlier depreciations contributed to a significant narrowing of current account deficits (India, Indonesia, South Africa and Thailand). Figure B1.3.1 Currency depreciations were more modest Figure B1.3.2 Distribution of changes in developing during the winter turmoil among countries country bilateral exchange rates with that reduced external imbalances the US$ % of countries CA balance (%) Brazil Peru Thailand Malaysia Indonesia 0 -10 -5 Chile Mexico 0 5 Philippines 10 India Turkey S. Africa Columbia Peru Philippines -5 Columbia Malaysia Chile Thailand Mexico S. Africa -10 Q42013 CA balance, max depreciation during Feb 2014 India Brazil -15 2012 CA balance, max depreciation during 2013 Turkey Indonesia -20 NEER appreciation (%) NEER appreciation (%) Source: World Bank, Haver Source: World Bank. percent decline in bond flows (figure 1.7) and the curren- December and caused a 60 basis points spike in develop- cies of many developing countries depreciated vis-à-vis ing country bond spreads. Overall, developing country the USD, but by less than in the summer (see box 1.3). yields rose slightly less than 20 bps. The equity selloff that ensued hit both high-income and The market jitters were relatively short-lived and capital developing-country stock-markets about equally hard (-6.2 flows to developing countries bounced back to an aver- percent in developing countries and -5.8 percent in high- age of $54 billion since March, more than fully recouping income markets). The selloff provoked modest flight to the February weakness. The strength of the rebound in safety flows, that pushed down US long term yields 45 bond financing flows meant that volumes for the first basis points compared with their peak of 3 percent in late quarter exceeded those in 2013 Q4, with the bulk headed 12 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Figure 1.8 Most developing country equity markets have Figure 1.9 Borrowing costs have fallen since the start fully recouped losses since mid-2013 of the year for developing countries Stock market indices, % change* 20 Cumulative change since May 2013 Peak to trough decline since May 2013 10 0 -10 -20 -30 -40 -50 Jamaica Ghana China Romania Lebanon Ukraine Ecuador Mexico Hungary India Malaysia Tunisia Bulgaria Egypt Namibia Bangladesh Morocco Kenya Brazil Argentina Vietnam Thailand Turkey Kazakhstan S. Africa Peru Philippines Source: World Bank.* As of 20th May. Source: World Bank. towards corporations in Latin America and the Caribbe- Two-thirds of the decline in developing country borrow- an region (mainly Brazil and Mexico). ing costs is due to a compression in spreads (the differ- ence between the yield on a 10-year sovereign bond and Developing country stock markets have also recov- that of the US 10-year treasury). The narrowing — ered, in many cases surpassing levels at the start of amounting to about 110 basis points since late August the year and relative to a year ago (figure 1.8). In part, 2013—has been underpinned by multiple factors includ- the recovery in flows reflects a resurgence in carry ing an easing in financial market tensions since the start trade investments, with investors borrowing at low of the year, a renewed search for yield (reflected in the rates in high-income countries to earn higher returns strong rebound in bond financing flows to developing in middle-income countries (notably Brazil, Turkey, countries since February) and the policy and economic India and Indonesia). adjustments in major middle-income countries that have helped to reduce vulnerabilities in these economies. Developing country borrowing costs have fallen, led by declining spreads As a result, overall financing costs for developing countries remain much lower than in the immediate pre-crisis years Notwithstanding the brief episode of volatility in late and are well below average costs at the start of the 2000s January, and in contrast with previous expectations of (figure 1.9). This in turn has allowed a growing number of a gradual normalization in long term interest rates and sovereign borrowers to return to markets in recent months risk premia, global financial conditions for developing including low- or un-rated sovereign borrowers such as countries have eased significantly since the end of last Pakistan and Ukraine. year. Developing country sovereign borrowing costs fell to 5.2 percent in early June from 6.7 percent in Declining commodity prices are both a headwind early September last year, unwinding more than half of the 2.3 percentage points increase in financing and a risk for commodity exporters costs that occurred during the spring and summer of 2013 (figure 1.9). Falling or even stable commodity prices (figure 1.10) have helped ease inflationary pressures (just as their earlier rise Part of the fall can be attributed to declining high income contributed to them), particularly in low-income countries. benchmark yields, amid growing expectations that central As such, recent commodity price developments have been banks in the US, Japan and Europe will hold long-term positive for commodity importing countries. For exporters, interest rates low for longer than had been expected to however, the story is mixed. Stable and still high energy support domestic recoveries and, in the case of the Euro prices have been good for oil exporters, but falling metals Area, initiate new credit easing measures to ward off de- and food prices have cut into incomes and government flation threats. revenues in a number of developing-country exporters. 13 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook While impacts so far have been manageable for most Figure 1.10 Metal prices have extended their falls while producers, income effects over the past year have exceed- food prices have turned up ed 1 percent of GDP in several producers (figure 1.11). Should energy prices fall or metal prices extend their loss- es they could slow growth in commodity exporting coun- tries, and add to current account and fiscal difficulties in some countries. Already the declines in metal prices that have been observed in 2014Q1 are likely to weigh on growth and government finances of major copper, iron ore and coal producers (such as Mongolia and Zambia) where expanding budgetary outlays and lack of fiscal re- straint in recent years have increased vulnerabilities. Recent upticks in grain prices come despite good supply conditions, perhaps reflecting El Niño worries Source: World Bank. Dry weather in South America (and to a lesser extent South East Asia) put pressure in internationally traded food prices during Q1 bringing an end to the steady decline of 18.4 Figure 1.11 Commodity exporters have suffered significant percent since mid-2012 of the USD price of most food terms of trade losses over the past year commodities including soybeans and sugar. Since then, most Estimated income effects from terms of trade changes* (% of GDP) grain and oilseed prices began weakening following the re- Guinea Peru -0.9 -0.9 lease of the U.S. Department of Agriculture’s first assess- Benin -1.0 ment of the 2014/15 season. The outlook projects record Equatorial Guinea Congo -1.1 -1.1 maize and rice production at 979 and 481 million tons and Gabon -1.4 stock-to-use (S/U) ratios of 18.8 and 22.9 percent for Burkina Faso S. Africa -1.4 -1.6 2014/15, somewhat higher than long term averages. The Ghana -1.7 outlook for wheat remains relatively tight, however, with Mongolia -2.1 production expected at 697 million tons, down 2.4 percent Malawi -2.3 Papua New Guinea -2.4 from the current season. Nevertheless wheat’s S/U ratio is Kyrgyzstan -2.5 expected to rise marginally due to lower feed use. Mauritania -3.5 Guyana -3.6 Surinam -4.1 Price risks remain on the upside. The adverse weather -5 -4 -3 -2 -1 0 conditions and the associated uptick in food prices at the Source: World Bank. * Terms of trade impact evaluated in terms of difference start of the year have been linked to the El Niño phenom- between 2014 forecast and average 2013 commodity prices. enon, which can inflict heavy damage on crops.2 The U.S. National Oceanic and Atmospheric Administration and Figure 1.12 If 2014 is an El Niño year, global grain yields Australia's Bureau of Meteorology gives a 65–70 percent could suffer, pushing up prices likelihood that this could be an El Niño year. Global yields Yield (Annual % change) of rice, which grow at 1.7 percent per annum in normal 2.5% Trend yield growth, 1960-2013 (54 years) years, grew only 0.7 percent during the five strong El Niño 'Strong & moderate' El Niño (12 years) years (figure 1.12). Growth in wheat yields experienced 'Strong' El Niño (5 years) 2.0% similar declines (from 2.1 to 1.4 percent per annum.) 1.5% From a regional perspective, El Niño tends to inflict considerable damage to crops in South America (mainly 1.0% rice and wheat), South East Asia (mostly rice), and Aus- 0.5% 2. The El Niño phenomenon is a prolonged warming of the Equatorial Pacific that occurs every 3-4 years. It lasts 12-18 months and negatively 0.0% Rice Wheat affects crop conditions, especially in the Southern Hemisphere. Accord- ing to NOAA’s Oceanic Niño Index, there have been five strong El Source: World Bank. Niño episodes since 1960 (the last and strongest on record occurred in 1997-98) and another seven moderate episodes (the last in 2009-10). 14 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook tralia (wheat). Oilseeds (especially soybeans), edible oils forts to regulate the shadow banking sector have raised (soybean and palm oil), and tropical beverages (coffee) stockpiling and funding costs, putting downward pres- could be affected as well. Rice and wheat production in sure on copper and iron ore prices, and could prompt South America, which grew at 2.6 and 4.7 percent, re- further de-stocking and weaker prices. spectively, during 1960-2013, contracted by 3.9 percent (rice) or grew only 0.7 percent (wheat) during the five Energy prices have been surprisingly stable, but increased strong El Niño episodes. Likewise, rice production in supply from the Middle-East could exert downward pressure South-East Asia, which grew at 2.6 percent during 1960- 2013, experienced no growth during El Niño. Wheat Energy prices have been range-bound since 2012 and production in Australia grew at 10.3 percent during the volatility has decreased (World Bank 2014A). Rising sup- past 5 decades but experienced a 27 percent decline dur- plies of unconventional oil and natural gas from the US; ing the strong El Niño years. efficiency gains globally; and ongoing substitution away from hydrocarbons due to their still high prices has fully Further upside price risks also stem from tensions in offset the impact of disruptions in Middle East supply. Ukraine. Between 2010-13, Russia and Ukraine accounted for 11 percent and 5 percent of global wheat exports, and With oil production scaling up rapidly in the Middle East, Ukraine accounted for more than 14 percent of global oil prices risk further falls, especially if Iran is able to maize exports. While the risks of disruption are low (only negotiate an end to sanctions. Coal prices have declined about 13 percent of Ukraine agricultural production grows more than 40 percent since 2011 reflecting slower de- in the conflict zones of the country), any shortfall in sup- mand in China but also rising global supplies from highly plies that occurs in tandem with the El Niño phenomenon competitive producers in Australia, Russia and North could lead to significantly higher prices, and pressures on America. Of course, the situation in Ukraine, represents current account and fiscal deficits among large importers upside risk. In the event of a physical disruption in sup- in the Middle East and Sub-Saharan Africa.3 plies, prices could spike rapidly. Robust supply and weakening Chinese demand weigh on metals prices The medium term outlook In contrast to food commodities, prices of internationally traded industrial metals have trended lower in Q1 after be- ing mostly flat during the second half of last year. Copper Global GDP growth is projected to gradually rise from and iron-ore prices have fallen sharply in the first five 2.4 percent in 2013 to 2.8 percent in 2014, 3.4 percent in months of 2014 (by 5.5 and 21.5 percent respectively), ex- 2015 and 3.5 percent in 2016. Rebounding growth in tending cumulative declines since peaks in 2011 to 30 and 46 high-income countries from 1.3 percent last year to 1.9 percent. The longer term decline in metal prices reflects percent this year and 2.5 percent by 2016 is the main moderate demand growth and a strong supply response, the impetus for the acceleration. latter a result of increased investment of the past few years. The acceleration in activity among developing countries is Base metal prospects remain critically dependent on de- projected to be more muted, as the recovery from the cri- velopments in China, which accounts for almost 45 per- sis of 2008 is by and large complete for these economies. cent of global metal demand — some of it stock-piled In addition, economic rebalancing in China, and a gradual for use as collateral in the shadow banking sector. Indus- tightening of financial conditions as the recovery in high- trial demand for metals could recover in the near term to income countries progresses are expected to moderate the extent that the recent stimulus package supports a outturns. Developing-country GDP growth is projected to rebound in activity. Ongoing financial reforms and ef- stay flat for the third year in a row at 4.8 percent this year and to rise only gradually to 5.5 percent by 2016. 3. Sub-Saharan Africa and Middle East and North Africa are the two regions most dependent on imported wheat. For example, all wheat in Growth in high income countries is set to Angola, Burkina Faso, Cameroon, Cote d'Ivoire and both Congos is strengthen... imported. Egypt, Libya and all Gulf States are importing most of their wheat as well. In volume terms, Egypt is the world's largest importer (7 percent of global imports), followed by Algeria (4 percent), Nigeria, and Iran (3 In the United States, the economy is projected to ex- percent each). For many of these countries Russia is a key supplier. More than one third of Russian wheat exports are destined for Egypt, pand 2.1 percent in 2014, up from 1.9 percent in 2013. followed by Turkey (15 percent), Yemen and Libya (4 percent each). The first quarter contraction will weigh on the annual 15 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook number — even as quarterly growth rebounds to close to 3 percent, responding to a reduced drag from fiscal con- Figure 1.13 The contribution of high income countries to global trade volumes will more than double solidation, improving labor market conditions and an upturn in investment spending, which had been held back in recent years by an uncertain fiscal policy climate. Together these factors are expected to lift growth further to 3.0 percent or thereabouts in 2015 and 2016. In the Euro Area, reduced fiscal drag is also projected to support an acceleration in activity from -0.4 percent last year to 1.1 percent in 2014 — the first annual increase in three years. In subsequent years growth is projected to firm further—reaching 1.9 percent in 2016. The recovery will be supported by positive reform momentum (including the establishment of a single supervisor and broad based backstops), and the gradual establishment of a virtuous cycle of rising confidence, improving asset Source: World Bank. values, employment and strengthening private demand. Activity should also remain supported by a further easing of the monetary policy stance — baseline projections and 2016, one-and-a-half times the $3.9 trillion increase factor in the cut in policy rates by the ECB in June in high-income GDP between 2010 and 2013 and larger through a lowering of short term interest rate projections than the expected contribution from developing coun- by some 30 basis points in 2015 and 2016, relative to tries. Developing countries also stand to benefit from a projections in the January 2014 GEP and also anticipates change in the composition of high-income demand, that low spreads in the periphery economies will persist. namely a rotation from less import-intensive categories Credit easing and other unconventional measures an- of spending (government spending) to more import– nounced in early June are not factored in the baseline and heavy goods and services (private consumption and in- can therefore be considered as an upside risk to the pro- vestment) (World Bank, 2014B). jections. Policy is not expected to tighten until deflation fears have been firmly laid to rest and there are signs of a With the contribution to global import demand of high- well-entrenched recovery. income economies doubling, growth in global trade volumes is expected to accelerate from 2.6 percent in 2013, to 4.2 per- Japan is the only major developed economy expected to cent this year, rising to about 5.4 percent in 2016 (figure 1.13). slow down this year (to 1.3 percent compared with 1.5 per- Increased demand for consumer and investment goods, cent in 2013), partly because the growth impetus from mone- should disproportionately benefit the manufacturing intensive tary policy stimulus may be fading and because of the fiscal economies of East Asia, developing Europe and Latin Ameri- drag from the April sales tax hike. Growth is expected to ca. Despite the acceleration, the dollar value of global trade recover to about 1.5 percent in 2016, supported by structural will not reach pre-crisis levels, mainly because commodity reforms and supportive policy. Stronger growth, along with prices are expected to be stable or falling in contrast to the the sales tax increase should help to improve or stabilize ex- abrupt rises of the pre-crisis period. While slower growth in tremely high public debt ratios and fiscal balances. Nonethe- China will serve as a counter-weight, the stronger demand less, over the medium to long term much more fiscal consoli- from high-income countries will dominate (box 1.4). dation (notably for entitlement spending) will be necessary. Corporate tax reforms (including a cut) also appear to be on Financial conditions are easy, but will tighten in the the cards, and if introduced, could be implemented mid-2015. medium term ... but developing countries’ growth will be The recent resurgence in capital flows, coupled with fur- ther easing of monetary policy in the Euro Area (see ear- slower to accelerate despite tailwinds from lier discussion and box 1.1) have relaxed financial condi- high-income country demand tions and unwound about half of the tightening that oc- curred during the summer of 2013. These conditions Reviving high income economies are projected to inject should support developing country demand in the short- $6.3 trillion into global spending power between 2014 run, but are likely to tighten over the longer-term. 16 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Box 1.4 Stronger high-income import demand should more than offset the influence of slower Chinese growth Slower growth in China as it deleverages and rebalances its econ- omy has raised concerns that developing countries (especially Figure B1.4.1 China is a major export destination for commodity exporters) will see current account balances deterio- many developing countries rate and growth slow, due to weaker import demand from China. While certainly a valid concern, the slowing of Chinese growth Commodity exports (% of total, 2012) unfolds against a backdrop of stronger growth in the high income 100 Yemen world that, depending on the degree of trade dependence on Chi- 90 Kazakhstan na and type of trade (figure B1.4.1), will offset the trade headwinds 80 coming from China. Cameroon Mozambique 70 Mauritania Chile 60 Indeed, strengthening high-income demand partly explained the surge Peru in developing country merchandise exports which rose at a 19 percent 50 Indonesia S. Africa annualized pace in the final quarter of 2013, bolstering end-year GDP 40 Brazil growth in a number of economies (Malaysia, Brazil, Colombia and 30 Tanzania Malaysia Peru to name a few). Momentum has eased since then, reflecting 20 Vietnam weakness in China and weather disruptions in the US, but should 10 Ehtiopia Thailand Pakistan recover as these economies re-accelerate — to the benefit of develop- 0 ing economies with close trade linkages to the US and Euro Area. 0 10 20 30 40 50 Exports to China (% of total, 2012) On balance, rising high income demand should more than com- pensate for slowing Chinese import demand. Model simulations Source: World Bank, WITS. Commodity exports comprise unprocessed indicate that in response to a 1 percentage point increase in high exports only. income growth and a corresponding slowdown in China, growth rises by 0.24 percentage points in developing countries (excluding China), 0.22 percentage points in East Asia (ex China) and 0.29 Figure B1.4.2 Growth in East Asia has remained robust percentage points in Latin America and the Caribbean region. despite a slowing in China, its main trading Commodity exporters, notably metals exporters, benefit somewhat partner less due to China’s large demand share in global metals markets. a More generally, fears of Chinese growth’s influence on developing country growth may be overblown. Slower growth in China in the post-crisis period had a negligible impact on the rest of East Asia, despite China being a major client for the region’s commodities, and its intermediate and final goods. Although average Chinese growth fell from 11.6 percent between 2003 -07 to 9.7 percent in the post-crisis period, growth in the rest of the region remained broadly stable and robust at around 5.5 percent (figure B1.4.2). Firms in the region have been able to leverage their underlying competitiveness and expand supply potential to find other markets to offset the slower demand growth coming from China — in much the same way as growth in developing countries accelerated be- tween 1995 and 2007 — even as growth in high-income countries was slowing (World Bank, 2012). Source: World Bank. a. The World Bank’s Global Macro-econometric model contains detailed trade linkages for 159 high income and developing countries. The United States is already bringing its quantitative eas- ventional monetary stimulus also on the cards if low in- ing programs to a close, and has indicated that a gradual flation persists for too long. tightening of traditional monetary policy could begin as early as mid-2015. In Japan, monetary policy is likely to To what extent financial conditions will tighten is, as yet, remain loose as long as it is necessary for achieving and unclear. In the scenarios outlined in the January 2014 maintaining the 2 percent inflation target. In the Euro edition of Global Economic Prospects, a gradual normaliza- Area, where significant further credit easing was an- tion of activity and policy was assumed to see long-term nounced in June, policy is not likely to tighten before the interest rates in the US rise to around to 3.8 percent by end of the projection period, with the ECB emphasizing the end of 2016 (consistent with market expectations), at its June meeting that key rates would remain at current and short term rates rising to 1.9 percent by the end of low levels for an extended period of time, with uncon- 2016. Under this scenario capital flows to developing 17 Table 1.2 Net financial flows to developing countries ($ billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Current account balance 313.5 167.7 111.5 -22.6 -89.8 -184.3 -144.0 -154.7 -170.6 Capital Inflows 765.9 709.2 1,265.3 1,221.6 1,128.3 1,299.2 1,376.2 1,435.3 1,476.1 Foreign direct investment 624.4 400.2 523.9 684.1 650.5 663.7 660.8 691.0 727.3 Portfolio investment -54.1 151.9 330.4 150.5 344.7 269.3 313.3 320.8 316.4 Equity -39.8 112.4 134.7 10.0 109.1 82.0 106.8 121.2 136.3 Debt instruments -14.2 39.6 195.7 140.5 235.6 187.2 206.5 199.6 180.1 Other investment/a 195.5 157.1 411.0 387.0 133.2 366.3 402.1 423.5 432.4 o/w Bank lending 194.9 15.7 30.1 124.2 101.7 112.8 106.5 121.2 134.1 Short-term debt flows 2.9 47.3 255.6 175.0 103.4 114.9 149.1 159.1 178.1 Official inflows 42.8 93.8 80.2 32.0 28.0 46.4 40.7 41.9 34.3 World Bank 7.9 18.2 23.0 7.0 12.2 11.2 .. .. .. IMF 16.6 31.7 13.5 0.5 -13.3 -7.3 .. .. .. Other official 18.3 43.8 43.8 24.4 29.0 31.8 .. .. .. Capital outflows -428.3 -269.9 -531.5 -561.5 -669.3 -574.7 -637.1 -734.6 -794.5 FDI outflows -244.4 -134.3 -163.0 -202.3 -228.1 -209.4 -235.0 -285 -320 Portfolio investment outflows 16.5 -59.7 -53.1 0.3 -69.3 -55.5 -62.1 -69.6 -74.5 Other investment outflows -200.4 -75.9 -315.4 -359.5 -372.0 -309.9 -340.0 -380 -400 Net capital flows (inflows + outflows) 337.6 439.3 733.8 660.1 459.0 724.5 739.1 700.7 681.6 Change in reserves -504.6 -558.0 -673.6 -490.6 -255.1 -517.9 -540.0 -590.0 -610.0 Net unidentified flows/b -146.4 -49.1 -171.6 -146.8 -114.1 -22.3 -55.1 44.0 99.0 Memo items (as a percentage of GDP): Current account balance 2.1 1.1 0.6 -0.1 -0.4 -0.8 -0.6 -0.6 -0.6 Capital inflows 5.1 4.8 7.0 5.8 5.2 5.6 5.6 5.4 5.1 Capital outflows 2.9 1.8 3.0 2.7 3.1 2.5 2.6 2.8 2.7 Source: World Bank. Note: e = estimate, f = forecast. /a including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. /b Combination of errors and omissions, unidentified capital inflows to and outflows from developing countries, and change in reserves. countries are expected to increase in nominal terms but income countries rise, developing country interest rates rise to moderate as a share of GDP (by about 0.5 percent of by even more. As this process unfolds, interest sensitive developing country GDP over the baseline), driven main- expenditures should come under pressure in developing ly by weaker portfolio investments (table 1.2). countries which will be a medium term drag on growth. More recently there has been some discussion about the The extent of adjustment that lies ahead for developing extent to which long-term interest rates will rise, with the countries depends on the extent to which they utilize the IMF suggesting that a continued bias toward saving, current window of loose global financial conditions to put largely explained by aging populations in the high-income their domestic economies in order. If the current accommo- world and limited declines in high savings rates in the dative financial conditions lead to an unwinding of the poli- developing world, will keep real interest rates below 2 cy and economic adjustments undertaken over the past year, percent (IMF, 2014). Meanwhile the Congressional Budg- or if policymakers delay additional adjustments and vulnera- etary Office (CBO) in the United States projects that bilities accumulate rather than decline, then the economic long rates will rise to 5.0 percent, versus just above 2.5 costs of policy normalization risk to be much larger. percent today and 1.6 percent in May 2013. Growth in developing countries is projected to Based on these estimates, less than half of the eventual increase in U.S. long-term interest rates has occurred thus gradually firm far. As U.S. long rates rise, there is likely to be additional adjustment of global asset portfolios and tightening of Reflecting these competing influences, developing coun- financial conditions. Typically as interest rates in high- try growth is projected to remain flat at 4.8 percent in 18 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Box 1.5 Recent improvements in global financing conditions and capital flow projections Beginning with this edition of Global Economic Prospects, the World Bank is aligning its capital flows projections with Balance of Payments Manual 6th Edition (BPM6) definitions. BPM6 definitions capture more comprehensively than BPM5 definitions data on secondary market trading of portfolio assets. This change has resulted in a significant increase in the level of recorded flows (net capital inflows rise from 4.7 percent of developing country GDP in 2013 under the bank’s earlier definition to 5.6 percent under the new definition). Even correcting for this change, projections for 2014 and the path for capital flows have been revised upwards in 2015 and 2016 from the January 2014 edition of GEP, mainly reflecting the unexpected easing of global financial conditions since February. While an increase in U.S. long term interest rates and global risk premia was previously assumed throughout 2014 (as markets priced in a gradual normalization of monetary policy in high income countries), US rates and developing country spreads have actually declined while indicators of investor risk aversion such as the VIX have narrowed. The new forecasts reflect these market conditions. They assume a delayed normalization scenario compared with January 2014 GEP ex- pectations, where global long -term interest rates and risk premia catch-up with their previously assumed trajectories by mid -2015, before slightly overshooting them in 2016. Simulations using the same models as developed in the January edition of Global Economic Prospects (GEP), suggest that more accom- modative financial conditions in 2014 can be expected to boost capital inflows to developing countries by some 0.5 percent of GDP this year and next (relative to earlier forecasts, table B1.5.1). The effect would dissipate by 2016, when capital flows would weaken in line with previ- ous expectations. Of course if conditions tighten more quickly, then the smooth transition assumed for these simulations would not occur and capital flows could contract much more sharply (see risk scenarios from the January edition of GEP, World Bank, 2014B). Table B1.5.1 Estimated impact of recent improvements in global financing conditions on capital flows to developing coun- tries (percentage point difference from January 2014 GEP explained by updated financial market assumptions) 2014 2015 2016 Capital flow s to dev. Countries (%) of GDP) 0.5 0.4 -0.1 U.S. long term interest rates -0.3 0 0.2 VIX index -9 -4 11 So urce: Wo rld B ank. No te: based o n results o f the quarterly Vecto r A uto Regressio n mo del presented in Chapter 3 o f the Jan 14 GEP . 2014 — marking the third year of sub-5 percent growth (Boxes 1.2 and 1.7 as well as Chapter 2 have more detail on regional economic developments and prospects.) — partly due to headwinds emanating from the conflict in Ukraine, which are projected to dent output in Europe  In East Asia and Pacific, with output gaps closed and Central Asia (both directly and indirectly through across the region, overall growth is projected to slow relatively modest impacts on the Euro Area, see box 1.5). insignificantly reaching 7 percent by 2016, with a mod- Overall aggregate developing country growth should est slowing in China (from 7.7 percent growth in 2013, slowly firm through 2016 to around 5.5 percent. to 7.4 percent in 2016) offset by some strengthening among other countries in the region. More robust growth may be elusive due to capacity constraints, particularly in the East Asia, Sub-Saharan  In developing Europe and Central Asia growth is Africa and Latin America and Caribbean regions. expected to slow sharply to 2.4 percent in 2014 partly These constraints have been visible in recent years in due to the conflict in the Ukraine (1.7 percent in the the tepid growth of several middle-income countries broader geographic region that includes transition (including, Brazil, India, South Africa and Turkey — economies like Russia, Poland and the Baltics that see World Bank, 2013A). In many regions, a gradual have already reached high-income status). Regional decline in commodity prices (which have been sup- trade, particularly among Central Asian countries is portive of incomes and government revenues in also expected to be hit by slowing demand in Russia, a many economies) may also weigh on the output of major trading partner and source of remittances for commodity exporters. In addition, a necessary tight- the other developing countries in the region. Assuming ening of policy to reduce inflation and current ac- tensions ease growth should firm to around 3.7 and count deficits in several middle-income countries will 4.0 percent in 2015 and 2016, supported by the recov- temper outturns. ery in high-income Europe. 19 Box 1.6 Trade spillovers from the ongoing tensions in Ukraine and Russia are slowing the recovery in Europe and Central Asia Elevated geopolitical tensions surrounding Ukraine and Russia are expected to shave off 7 and 1.7 percentage points from GDP growth respectively in these countries in 2014, with Ukraine’s economy expected to contract by 5.0 percent this year, and Russia to grow by just 0.5 percent. Given large trading and remittance linkages between Russia, Ukraine and other countries in the region — this slower growth will be a regional drag on growth (table B1.6.1). Model simulations suggest about 1.0 percent of the 1.3 percentage point markdown in the region’s forecast can be attributed to weaker import demand from Ukraine and Russia. Excluding Ukraine, the crisis subtracts on average 0.3 percentage points from GDP growth in other countries in the region, further slowing growth in some of the already weak economies in the region such as Belarus. Impacts outside the region are smaller but not insignificant. Under the baseline, simulations show a decline of about 0.24 percentage points in high income GDP growth (0.13 excluding Russia) and 0.15 percentage points for developing countries (0.08 excluding Ukraine), all occurring through trade linkages. In aggregate, this shaved off some 0.2 percentage points from global growth this year. Table B1.6.1 Baseline impacts from the Ukraine crisis on the global economy Real GDP (% change) Current Account Balance (change, % of GDP) Fiscal Balance (change, % of GDP) Europe & Central Asia -0.9 0.3 -0.3 Europe & Central Asia(excl Ukraine) -0.2 0.0 0.0 High Income countries -0.1 0.0 -0.1 High Income countries(excl Russia) -0.1 0.0 0.0 Developing countries -0.1 0.0 0.0 Developing countries (excl Ukraine) -0.1 0.0 0.0 World -0.1 0.0 -0.1 Source: World Bank.  Output in Latin America and the Caribbean, is pro-  Growth in South Asia is expected to increase modest- jected to expand only modestly over the forecast period, ly in 2014 by 5.3 percent, mainly because of sub-par weighed down by supply side constraints. Regional albeit improving growth in India. Regional growth growth is projected to weaken to 1.9 percent in 2014, should improve to 6.3 percent by 2016 helped by due to weakness in Argentina and Brazil. Better external some progress on policy reforms in India, Bangladesh demand conditions and the fruits of reforms in Mexico and Pakistan and a more supportive trade environ- should strengthen regional growth in 2015-2016— alt- ment. However, medium term forecasts have been hough bottlenecks and limited economic slack, will con- marked down by nearly half a percentage point reflect- strain growth to 2.9 and 3.5 percent in 2015 and 2016. ing the effects of slowing investment in recent years on potential growth, structural capacity constraints  Growth in the Middle-East and North Africa con- and sustained inflationary pressures. tinues to be stymied by political and military tensions. Regional growth projections for 2014 are nearly one  Growth in Sub-Saharan Africa is expected to remain flat percentage point lower than January projections, re- at around 4.7 percent in 2014 mainly due to weakness in flecting sharp contractions in Libya for the second South Africa and oil-infrastructure bottlenecks in Angola, year running. Elsewhere in the region, a recovery is two of the region’s largest economies. Growth in the rest of getting underway due to rebounding oil production the region is expected to remain robust, boosted by resilient and the high-income European recovery. Growth is domestic demand. Looking forward, with most economies expected to gradually strengthen to 3.5 percent in operating at or close to potential, growth is projected to 2016. While encouraging, the pace of the expansion pick up to about 5.1 percent in 2015 and 2016. Persistent will not be fast enough to make substantial inroads fiscal and current account imbalances require a tightening of into the unemployment and spare capacity accumulat- monetary and fiscal policy to contain macroeconomic sta- ed over the past several years. bility risks in several economies, notably Ghana. 20 Box 1.7 Regional Economic Outlook (The regional annexes to this volume contain more detail on recent economic developments and outlook, including country-specific forecasts.) The outlook for the East Asia and the Pacific region continues to reflect several counterbalancing factors, including domestic ad- justment, volatile financing conditions, political crisis in Thailand, and bumpy, but sustained recovery in global demand for exports. Overall growth in the region is expected to slow insignificantly to 7.0 percent by 2016, about 2 percentage points slower than the pre -crisis boom years but broadly in line with potential. Growth for China is expected to ease gradually to 7.6 percent in 2014 and to 7.4 percent by 2016, with less, but only gradually declining reliance on credit -induced investment-led growth. Regional growth (excluding China) is projected to slowly accelerate to 5.5 percent by 2016 as external demand solidifies, adjustment is compl eted and tensions ease in Thailand. Regional risks include volatility and eventual tightening of global financing conditions, poss ible set- backs in China’s restructuring and a weaker contribution from net exports than assumed in the baseline. Potential escalation of re- gional political tensions presents additional risk to the outlook. The outlook for the developing Europe and Central Asia region has weakened in the near term owing to sharper -than-expected slowdown in a number of large economies in the region, including Kazakhstan, Turkey, and Ukraine. While most developing coun- tries in the Central and Eastern Europe sub-region are expected to see strengthening growth in 2014 due to stronger import de- mand from the Euro Area, a marked slowdown in 2014 is expected among the sub -region of the Commonwealth of Independent States, reflecting weaker revised forecast in growth in Kazakhstan and Ukraine, as well as broader spillovers from slowdowns in Russia and China—the largest trading and investment partners—and weakening commodity prices. The sub-region is also exposed to worsening geo-political tensions in Russia and Ukraine. Belarus, which was already in difficulty last year, is heavily exposed through trade linkages to Ukraine and Russia as are Armenia and Moldova, while remittances from Russia to Armenia, Kyrgyz Re- public, Moldova and Tajikistan are a substantial share of their GDP. An escalation of political tensions between the EU and R ussia is a key risk. Should a disruption in Russia’s oil and gas supplies occur, or global confidence be severely impacted, it could prove costly for the regional and global recovery. Turkey remains vulnerable to domestic and external shocks. With output gaps largely closed, the outlook in Latin America and the Caribbean is broadly positive, with regional GDP growing at around potential, picking up from 1.9 percent in 2014, to 2.9 percent in 2015 and 3.5 percent in 2016, supported by rising hi gh- income import demand and accelerating capital flows to the region, especially after 2014. However, the extended decline in com- modity prices together with the slowdown in China will weigh on prospects. Growth should remain weak in Brazil at 1.5 percent in 2014, due to weakened business confidence, tightening credit and other microeconomic impediments, rising modestly to 2.7% and 3.1% for 2015 and 2016. Mexico’s prospects are better on the back of stronger U.S. growth and reform dividends. Argentina and Venezuela are projected to undergo periods of adjustment and weak growth, although recent policy measures by Argentina intro- duce upside risks to the outlook. Downside risks include a more severe and extended softening among the region’s largest econo- mies, a disorderly slowdown in China, and a sharper slide in commodity prices which could further hurt commodity exporters. Growth in the developing countries of the Middle East and North Africa region is expected to strengthen gradually but to remain weak during the forecast period. The outlook for the region is shrouded in uncertainty and subject to a variety of risks, mostly do- mestic in nature, and linked to political instability and policy uncertainty. In the baseline scenario only a gradual improvement in the political uncertainty that has plagued the region for the past three years is expected. Consequently, aggregate growth for the region is expected to slowly pick up to about 3.5 percent in 2016, and remain well below its potential growth. In developing oil importing countries, consumption will be underpinned by large public outlays on wages and subsidies, while public investment will likely be constrained in the forecast period by large fiscal deficits. Growth in developing oil exporters will strengthen as oil prices remain rela- tively high and infrastructure problems and security setbacks are resolved and mitigated. Firming global growth and a modest pickup in industrial activity should help lift South Asia’s GDP growth to 5.3 percent in 2014. Although quarterly growth should accelerate during the second half of 2014, a weak start to the year will weigh on annual growth. Regional growth should rise to 5.9 percent in 2015 and 6.3 percent in 2016 (with the acceleration focused on India), supported by a gradual pickup of do- mestic investment and rising global demand. The forecasts assume that reforms are undertaken to ease supply-side constraints (particularly in energy and infrastructure) and to improve labor productivity, fiscal consolidation continues, and a credible monetary policy stance is maintained. A key risk to the near-term outlook is weak seasonal monsoon rains, which may result in high food inflation and weak consumption growth. A high share of stressed loans can hamper banks in adequately financing a resumption of the investment cycle. A slowing of the pace of reforms and security uncertainties are other risks. External headwinds include financial market volatility accompany- ing a tightening of global financial conditions, and escalation of geopolitical tensions that could cause disruption in global energy supplies. Medium-term growth prospects for Sub-Saharan Africa remain favorable, with regional growth projected to remain broadly stable at 4.7 percent in 2014, rising moderately to 5.1 percent in 2015 -16, supported by investments in natural resources and infrastructure improved agricultural output and firming external demand. Growth is expected to be strong in East Africa, increasingly supported by FDI flows into offshore natural gas resources in Tanzania, and the onset of oil production in Uganda and Kenya. Tight monetar y policy, combined with labor strikes and weak electricity supply, will keep growth subdued in South Africa. Growth in Angola is ex- pected to pick up moderately after a slowdown in 2013, helped by a rebound in oil output and infrastructure investment. Growt h should remain robust in Nigeria, led by further expansion of non -oil sectors. Regional risks remain skewed to the downside and in- clude weaker growth in China, the largest commodity consumer; the reversal of capital flows as global monetary conditions tighten; election related uncertainty (Nigeria), security issues in South Sudan and the Central African Republic, and higher inflation from currency weakness and rising food prices. 21 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Risks and vulnerabilities Geo-political risks remain elevated, including the conflict in Syria. A further sustained escalation in tensions in Ukraine — either militarily or in the form of tit-for-tat sanctions — could have significant impacts on global Acute global risks emanating from high income countries economic confidence, especially if they increase uncer- have subsided considerably in terms of likelihood and tainty to the point that investors and consumers hold potential impacts, in part because some of them material- back on spending. A physical disruption of energy and ized in less virulent forms than anticipated earlier. grain supplies would take a further toll on the already weak economies of Russia and Ukraine, and set back a That said, some earlier risks remain and new ones have nascent recovery in the Euro Area (a major buyer of Rus- risen to the fore. sian energy) although significant mutual interdependence in energy markets reduces the likelihood of such disrup-  In the Euro Area, sliding inflation has raised real inter- tions (box 1.8). est rates, potentially slowing the recovery. Inflation expectations remain anchored so far, but downward As financial conditions tighten interest rates will rise adjustments could unleash a pernicious debt-deflation cycle and undermine the ability of monetary policy to Tighter global financial conditions over the next five support the economy. years as monetary policy is normalized in high income economies is inevitable (although the timing and extent  In Japan, the key risks are that the sales tax hike might of the tightening remain uncertain). And it will imply significantly dent the domestic recovery, while medi- weaker financial flows and rising costs of capital for de- um-term prospects will depend on the degree to which veloping countries. supply-side reforms succeed in boosting growth. As discussed earlier, with less than half of the potential  In the US, there are signs that the recovery in some increase in long term US rates having occurred so far, asset markets is running ahead of the economic cycle, much more financial sector tightening is yet to come, driven in part by very low interest rates. If conditions pushing up borrowing costs and spreads for developing stay very loose too long some of the same kind of countries. If interest rates rise too rapidly or there are vulnerabilities that built up prior to the crisis of 2008 sharp pullbacks in capital flows, economies with large could re-emerge. external financing needs or rapid expansions in domestic credit in recent years could come under considerable Increasingly, these risks are being balanced by the possi- stress. Moreover, market sentiment could become unset- bility of better than expected growth, particularly in the tled around key decision points associated with the nor- Euro Area, in light of recent monetary support measures malization of high-income monetary policy, for instance announced, and the US. A quickening of the pace of the timing of the first policy rate hikes in the US. reforms in Japan could also bolster confidence, improv- ing firms’ incentives to invest and increase wages, boost- The degree to which interest rates in developing countries ing household incomes and willingness to spend. will rise is uncertain. However, there is a large literature doc- umenting the sensitivity of financial conditions in develop- ing countries to changes in global liquidity conditions. In Risks to developing countries are less acute particular, estimates based on Agosin and Diaz-Maureira than a year ago but remain (2013) Kennedy and Palerm (2013) and Kennedy (2014) suggest that a tightening of global financial conditions could Although risks are reduced compared to last year due to finan- cause interest rates spreads in more than half of developing cial and policy adjustments, developing countries remain vulner- countries studied to rise by more than 100 basis points able to volatility in global financial markets and other risks. (figure 1.14).4 While striking, these estimates could prove conservative, if tightening financial conditions lead to a dete- Tail risks include the rebalancing of China’s economy rioration in domestic factors such as sovereign ratings fiscal amid a cooling property market, and an intensification of deficits, current account balances and international reserves. country-specific problems in other systemically important large middle-income economies such as Turkey that 4. Assuming that global financial conditions return to long-run nor- could be the spark for volatility in global financial mar- mal (TED spreads in the US double to 50 bp; the term premium in kets, with contagion spreading to other developing econ- the US rises 90 basis points; and US monetary policy returns to neu- omies with similar weaknesses. tral; Kennedy, 2014). 22 Box 1.8 A severe escalation of tensions in Ukraine could lead to sharp capital outflows from developing countries and set back growth A sharp escalation of tensions in Ukraine poses acute risks to the global economy. These could operate through a number of chan- nels, including commodity, financial and commodity linkages. In commodity markets, Russia is the world’s largest oil supplier with production in excess of 10 million barrels per day (mb/d) or 13 percent of global crude production. Of this it exports some 4.7 mb/d, of which 2.7 mb/d go to Europe which would be hard to re- place. A significant rise in global oil prices would affect the global recovery underway and additionally put pressure on oil -importing developing countries with large current account deficits. Europe depends on Russia for nearly 30 percent of its natural gas supplies.in part because supply disruptions in North Africa have cut into alternative sources. In the event of supply disruption or sanctions, economic costs could be high. Additional Europe an LNG imports from elsewhere in the world would boost global demand and prices—to the detriment of other importers including Asia, Western Europe and parts of Latin America. Even assuming no boost to LNG prices, if current consumption of Russian natural gas was replaced by global LNG (assuming supply could be found), EU LNG import costs would rise by 50 percent (or about 0.15 per- cent of GDP). Hits would be much larger for major importers. In addition, both Russia and Ukraine are large grain producers, accounting for 11 percent and 5 percent of global wheat exports, and Ukraine accounting for more than 14 percent of global maize Figure B1.8.1 Default risks had increased sharply in exports. Sub-Saharan Africa and Middle East and North Africa are both Ukraine and Russia, but have come the two regions most dependent on imported wheat, and for Tur- down in recent months key and Egypt, Russia is a key supplier of wheat. Overall the probability of disruption is low. In the Ukraine, only about 13 percent of agricultural output is produced in eastern Ukraine, and so the conflict is unlikely to generate major disrup- tions. At the same time, importers of Russian wheat are unlikely to impose sanctions disrupting production. That said, with the El Ni ño weather phenomenon looking increasingly likely in the second half of this year, global grain markets will be sensitive to any temporary disruption in supplies. Grain prices have already increased by 2.5 percent since February due to drought conditions in North and South America. In energy markets however, a two-sided dependence (Russian oil and gas account for 9 percent of GDP, a quarter of revenues and Source: World Bank, Deutsche Bank. * Recovery rate of 40% assumed. nearly two-thirds of export revenues), means that disruptions are low-probability events. Financial linkages are manageable. In addition to banking sector exposure (mainly European banks with assets in both Ukraine and Figure B1.8.2 A prolonged bout of risk aversion linked Russia, amounting to about $200bn), Ukraine’s economy was al- to the Ukraine crisis could severely dent ready fragile before the crisis. Sovereign bond spreads rose by 570 capital flows and developing country GDP basis points from January lows to over 1250 basis points in April, but Taper-related extended increase in US yields have since eased to below 1000 as easing tensions and the recently Moderate increase in risk aversion (market based) Sharp increase in risk aversion (possibly Ukraine related) agreed $17 billion IMF and $1.5 billion World Bank support package Deviation from baseline, VIX points, Change in GDP growth (% of has reduced the likelihood of an outright default (figure B1.8.1). capital flows (% of baseline) baseline) 60 2.0 1.5 Accordingly, the most important risk channel is likely to be confidence 40 1.0 impacts associated with a persistent and significant deterioration in 20 political tensions. This could cause firms and households to delay 0.5 spending and trigger sharp shifts in global sentiment, flight to safety 0 0.0 flows and sharp falls in global equity markets, with developing country -20 -0.5 currencies and bonds also coming under pressure. Figure B1.8.2 -1.0 -40 shows the impacts of a sharp rise in global risk aversion as proxied by -1.5 a moderate increase of 20 bp) in the VIX index and a more severe -60 -2.0 Impact on flows (%, Impact on VIX (LHS) Impact on GDP increase of 40 bp, which is sustained for 3 months. These cause sharp LHS) (%deviation from falls in capital flows (between 30 - 60 percent) and a decline in devel- baseline, RHS) oping country GDP of 0.7 to 1.4 percent of GDP. In the more acute Source: World Bank. scenario, impacts are slightly larger than they would be if long term US yields rose by 100 basis points. 23 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook External financing needs have declined in some countries, Figure 1.14 As and when global financial conditions but remain a risk in others tighten, developing country bond spreads could increase significantly for some Heavy external financing needs (high current account Predicted increase in EMBI spreads in response to tightening global financial conditions, basis points deficits, and large amounts of short-term debt) make 300 a country more vulnerable to reversals in international 250 capital flows and increases in interest rates. The most vulnerable to a deterioration in financing conditions 200 include countries that rely more on portfolio flows (as 150 opposed to less volatile remittances and FDI) to fur- 100 nish foreign currency. Some 18 developing countries 50 find themselves with external financing needs that exceed their foreign currency reserves, with require- 0 ments exceeding 10 percent of GDP in many cases Brazil Thailand China Uruguay Chile South Africa Hungary Mexico El Salvador Costa Rica Indonesia Jamaica Dom Rep Argentina Poland Ukraine Turkey Colombia Peru Malaysia Panama Russia Bulgaria Ecuador Guatemala Philippines Venezuela Panama (figure 1.15). Source: World Bank, Agosin and Diaz-Maureira, 2013, Kennedy and Palerm, High current account deficits and deep financial mar- 2013, and Kennedy 2014). kets were among the factors that contributed to the strong reversal of capital flows in those developing Figure 1.15 Countries with large funding needs and low countries that experienced them during the summer reserve cover may be most vulnerable to a of 2013 (World Bank, 2014B; Eichengreen & Gupta, tightening of financial conditions 2014). Brazil, India, Indonesia, Turkey and South Af- % of international reserves % of GDP 300 60 rica bore the brunt of financial market pressure dur- 250 Estimated external financing needs in 2014 50 ing that period. Estimated external financing needs in 2014 (RHS) 200 40 Exchange rate depreciation (averaging 14.5 percent 150 30 in nominal effective terms by year-end for these 100 20 countries) and the policy tightening that ensued re- 50 10 duced import demand and improved export competi- 0 0 tiveness. This in turn contributed to a narrowing of trade and current account deficits and supported a Kyrgyz Republic Tanzania Kazakhstan Moldova Brazil India Romania Hungary Dominica Kenya Albania Niger Ghana Jordan Indonesia Costa Rica Jamaica Mongolia Pakistan El Salvador Nicaragua Ukraine Turkey Belarus Malaysia Madagascar Mozambique rebound in capital flows that diminished their vulner- ability to future shocks. Overall, the trade balance in Source: World Bank, BIS. External financing needs measured as current these countries improved by 1.8 percent of their account balance less short term debt coming due in 2014 minus estimated combined GDP between Q2 and Q4 of 2013, with principal repayments on medium and long-term debt coming due in 2014. two-thirds of it accounted for by a compression of imports (figure 1.16), and the largest adjustments Figure 1.16 Weak imports have helped improve trade defi- occurring in India, Indonesia, Thailand and more cits in countries that felt significant financial recently South Africa. market pressure in mid-2013 Change in trade and current account balances, Q2 2013 to Q1 2014 (% of GDP) However, the sustainability of these improvements is 6 Change in exports unclear. For instance, a significant portion of the im- 5 Change in imports (inverted sign) Change in trade balance provement in trade deficits last year in Indonesia came 4 Change in current account balance from favorable commodity price movements and a 3 surge in mineral-ore exports ahead of a ban on unpro- 2 cessed exports that came into effect in January and the 1 trade deficit has begun to widen again. In India, nearly half of the narrowing of the goods trade deficit last year 0 was due to measures to reduce gold imports. Although -1 export momentum increased in April, the trade deficit -2 has remained broadly stable since November 2013. India Indonesia Turkey Brazil South Africa Meanwhile in Brazil and Turkey, current account im- Source: World Bank. Change in trade balance & current account balance provements have been less marked than in India, Thai- for Turkey and South Africa between Q2 and Q4 2013 land and South Africa. 24 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Figure 1.17 Foreign ownership of local government bond Figure 1.18 Debt issuance in international markets has markets has risen sharply in recent years increased, mainly led by corporates Foreign ownership of local government securities markets (%) Foreign ownership of local government securities markets (%) Deal Value $ bn 70 180 61 Non-investment grade borrowers 164 60 160 Investment grade borrowers 144 140 50 2007 2013 43 120 109 40 36 36 35 32 100 30 30 83 87 30 80 23 80 22 70 63 20 17 54 58 15 16 16 60 53 13 11 11 41 10 40 34 31 3 22 22 0 1 20 0 Hungary Romania Thailand Peru Malaysia Mexico South Africa Indonesia Turkey Brazil 0 2007 2008 2009 2010 2011 2012 2013 2014 YTD (as of May) Source: World Bank, Haver. Source: World Bank. Rapid domestic credit expansion in past years age has increased significantly in Turkey (mainly interme- has increased leverage and vulnerability diated through the banking sector). In India, a significant part of corporate debt in recent years has been accounted for by overseas borrowing of relatively short maturity The past several years of low interest rates have been (World Bank 2014B). periods of rapid domestic credit growth, some of it fueled by capital inflows and cheap finance from abroad. When global financial conditions tighten, the weight of debt servicing and refinancing costs on corporate bal- At one level, increased local-currency bonds issuance is a ance sheets will rise and could pose risks to domestic positive development, speaking to enhanced domestic banking sectors, notably in Turkey and India where intermediation and reduced exchange rate risk due to substantial stocks of external corporate debt are com- currency mismatch. However, countries remain exposed ing due. Depreciations in both countries have increased to shifts in investor sentiment because much of this lo- borrowing costs, with some heavily indebted large cally issued debt is nevertheless held by overseas inves- firms in India having struggled to renegotiate debt re- tors (figure 1.17). payment schedules (World Bank 2014B). In Turkey, the situation may be better as about two-thirds of ex- So far, institutional investors, who hold much of this ternal corporate debt is thought to be hedged. Never- debt, have not cashed in their positions in the face of theless, markets remain edgy: Turkish corporate bond volatility. However, a further bout of global risk spreads jumped some 200 basis points last summer and aversion could lead to pullbacks from these market, some 100 basis points in January. Although spreads especially since developing-country credit ratings eased after both episodes, they remain higher than pri- have deteriorated lately — reversing an earlier trend or to May 2013 levels. toward improvement. Since the beginning of the year, developing-country sovereign debt downgrades The relative inexperience of non-investment grade have exceeded upgrades 13 to 3. Downgrades were sovereign borrowers that have taken advantage of the concentrated in Ukraine, South America and Sub- surge in global liquidity and low interest rates to bor- Saharan Africa. row in international markets (in some cases for the first time e.g. Mongolia) is also a source of concern. Corporate debt issuance by private and state-owned cor- Much of the debt has been issued over relatively short porates in international markets has also increased sub- maturities (typically five years), raising concerns over stantially in recent years (figure 1.18). Much of the in- countries’ ability to service these debts if they roll crease has occurred in Latin America as a substitute for over at higher interest rates, especially if rollovers bank lending and has involved firms in the resource sec- periods coincide with periods of heightened global tor. Among investment grade borrowers, corporate lever- financial turbulence. 25 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook Figure 1.19 Credit growth is slowing but past buildups still Figure 1.20 Despite recent rate hikes real interest rates pose risks remain low in many countries Credit to private sector, change between 2007Q1 and 2013Q3 (% of Percent, percentage points 6 GDP) 60 4 50 Non-financial Corporate Households 2 40 0 30 -2 20 Change in real policy rate (since April 2013) 10 -4 Real policy rate 0 -6 -10 -8 Indonesia China India Brazil Hungary Turkey Russia Mexico South Africa Source: World Bank, BIS. Source: World Bank, Haver. A downturn in credit cycles or higher costs of funding Accordingly, the pace of deleveraging in China is a key could amplify risks risk. If policy makers move too slowly—or choose to support the economy using traditional credit levers as Although the domestic credit cycle has begun to turn, they have done in recent years —they risk compounding high domestic debt stocks and/or the rapid expansion in existing problems, exacerbating the risks of a hard land- stock levels in recent years remains a source of concern ing in the medium term. If they move too fast, they risk a in several developing economies, including Brazil, Indo- credit crunch which in turn could intensify existing pres- nesia China, India, Malaysia and Thailand reflecting past sures on the corporate, property and financial sectors, credit-fuelled growth (figure 1.19). While financial crisis and rising financial sector risks. risks are limited in most economies (World Bank 2014B), banking systems have to go through a cooling phase of slower credit expansion, which is likely to trigger rising defaults. Moreover, tightening lending standards and Macroeconomic Policies higher costs of funding will weigh on activity, amplifying profit pressures. These pro-cyclical forces are already visible in India where non-performing assets (mostly Further gradual policy tightening would both located in large public sector banks) are estimated to be above 10 percent if “restructured assets” are also taken reduce vulnerabilities and improve resilience into account. The monetary policy tightening induced by the volatility In China, domestic leverage, at 240 percent of GDP, is of the past year generated a welcome tightening in the one of the highest in the world making companies ex- stance of monetary policy in many developing countries, tremely sensitive to changes in income and interest rates. which, by restraining domestic demand, helped diminish Meanwhile corporate profitability and cash flows are both internal and external imbalances. under pressure due to slowing growth and high refinanc- ing needs. In addition, a massive residential and construc- Policy tightening contributed to a slowing in the pace of tion boom—a key driver of growth in recent years, and a real credit growth in East Asia (Thailand, Indonesia, Ma- major source of revenue for local governments5— is laysia and China) and in Brazil as well as in smaller econo- cooling and could turn into a sharp correction as credit mies such as Armenia. However, adjustment remains par- standards are tightened. tial and credit continues to expand very rapidly in Turkey, and available data show no significant slowing in South Africa. This trend seems to have reversed in May when a 5. Local governments in China derive some 61 percent of revenues from number of countries, including Turkey, Hungary, Armenia, land sales. Land sales in the largest 20 cities last year fell by 5 percent. and Serbia cut policy rates. Overall, and despite what have 26 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook been some substantial rate hikes in some cases, real interest rates in many developing countries remain very low and Figure 1.21 Rising inflation in a few large middle-income countries has pushed the aggregate up over even negative in some cases (figure 1.20). time Inflation (% yoy) Tighter policy would help contain stubborn inflation 10 High-Income in several middle-income countries 8 Developing 6 In contrast to high-income countries average developing country inflation (consumption weighted) has been stead- 4 ily rising over the past 15 years (figure 1.21). 2 To a large extent this pickup in developing country infla- tion is a middle-income phenomena (figure 1.22). Infla- 0 tion in low-income countries and most middle-income -2 countries has been stable or declined following commod- Jan-00 Jul-01 Jan-03 Jul-04 Jan-06 Jul-07 Jan-09 Jul-10 Jan-12 Jul-13 ity-price induced run-ups. But in about a third of middle- Source: World Bank, Haver. income countries, inflation has been slow to abate de- spite the fall in global food prices and broad stability in global energy prices in recent years. Figure 1.22 Influenced by commodity prices, inflation in low-income countries has eased Among major economies in the Middle East and North Africa region (Egypt, Iran), and in Latin America (Venezuela and Argentina), high or rising inflation re- flects regional or domestic political tensions, weaker cur- rencies or severe macroeconomic imbalances. In several larger middle income economies persistent inflation reflects excess demand pressures (due to easy policies and strong credit growth) in recent years, which have fed rising inflation expectations. In these economies inflation momentum has continued to accelerate and annual inflation has remained high in recent months (Brazil, Turkey, Pakistan, Mongolia, Belarus, Zambia Ghana, Uganda and South Africa). In India inflation mo- Source: World Bank, Haver. mentum has increased, mainly reflecting rising food pric- es. Inflation is also on a decline in Indonesia due to posi- tive base effects related to the removal of fuel subsidies Figure 1.23 Inflation has accelerated in some countries and remains above target during 2013. Nevertheless, annual inflation remains CPI, % change, year-over-year above the upper bound of central bank targets or objec- 16 tives in many cases, including in Indonesia (figure 1.23). 14 Apr-14 Upper bound of inflation target 12 Recent exchange rate depreciations have 10 contributed to inflation pressures 8 6 Earlier exchange rate depreciations partly explain the 4 stickiness of middle-income inflation. While deprecia- 2 tions can improve external balances by making domestic 0 Romania Pakistan South Africa Sri Lanka China Belarus Ghana India Nigeria Kenya Moldova Vietnam Turkey Indonesia Uganda Philippines Serbia Brazil Chile Albania Hungary Botswana Georgia Armenia Mexico Colombia Thailand USA Japan Mongolia Mozambique Peru UK Euro area goods cheaper abroad and by raising the domestic price Zambia Azerbaijan Dom. Republic of imported goods, they also contribute to inflation. An analysis of the pass-through effects of exchange rate Source: World Bank.* implicit inflation target for 2015 for India. depreciations among developing countries suggests that 27 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook the depreciations that occurred in the summer of 2013 With output gaps having closed and most developing and early 2014 may have added between 1 and 4 percent- countries growing in line with potential, this suggests that age points to inflation in most developing regions and more tightening will need to be done if debt-levels are to that the effect will begin to fade between June and De- be restored to their pre-crisis levels and if fiscal space is cember 2014, depending on the size and timing of coun- to be created so that countries can respond effectively to tries’ depreciation — as well as the extent of slack in the future shocks, should they arrive. Despite some consoli- economy (see box 1.9, and Special Topic at the end of dation, structural fiscal deficits remain large in absolute this report for more). terms in several economies in East Asia (Papua New Guinea, Cambodia, Laos and Mongolia) and also in large Fiscal adjustment is also required to increase middle-income economies such as Ghana, India, Kenya, Malaysia, and South Africa. resilience to external shocks Among middle-income countries with relatively open While tightening monetary policy will help lower infla- capital markets, a tighter fiscal stance will help take tion, ease the pace of credit growth and reduce the likeli- some of the pressure off monetary policy — while re- hood of domestic financial crises, fiscal tightening is also ducing sovereign vulnerabilities to an eventual increase called for in a number of countries. in interest rates. Overall the fiscal position of developing countries has deteriorated significantly since 2007 (figure 1.24). Thirty seven percent of developing countries saw their fiscal Structural reforms deficits rise by 3 or more percent of GDP between 2007 and 2013. Currently, almost half of developing countries have a government deficit that exceeds 3 percent of Supply side reforms are needed to increase GDP. Moreover, debt levels have increased almost across the board with debt-to GDP ratios in more than resilience and lift productivity growth half of developing countries having risen by more than 10 percentage points since 2007 (figure 1.25). Overall, while the prospects for developing countries are for solid if not spectacular growth, the path forward is Some fiscal tightening has occurred in recent years: the aggre- not assured — as the sub-5 percent growth of the past gate cyclically-adjusted budget balance for developing coun- few years attests. Many developing countries have privi- tries widened by 3.4 percentage points between 2005 and leged demand stimulus over structural reforms during the 2009 to -4.2 percent. Since then it has gradually narrowed to - post crisis period. Reforms have stalled in recent years 3.2 percent in 2013, an improvement of nearly a third. even as structural bottlenecks in energy and infrastructure Figure 1.24 Fiscal deficits are much higher than in 2007 in Figure 1.25 Debt rose by more than 10 percentage points developing countries of GDP half of developing countries % of GDP No of countries 16 0.0 -0.5 14 -1.0 12 -1.5 10 -2.0 8 -2.5 6 -3.0 -3.5 4 -4.0 Structrural deficit Actual 2 -4.5 0 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 More -5.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Change in debt to GDP ratio (% points, 2007-2013) Source: World Bank. Source: World Bank. 28 Box 1.9 Exchange rate pass-through to domestic inflation in developing countries Two episodes of global financial turbulence over the past 12 Figure B1.9.1 With currency depreciations unwinding months have caused capital flows to slow temporarily, forcing inflation pressures should begin to ease in sharp depreciations of the currencies of several countries with the second half of the year, all else equal large current account deficits. A their peak, depreciations ex- % , -ve: depreciation ceeded 10 percent in nominal effective terms in 16 developing 5 countries, although many currencies have recovered value 0 since then (figure B1.9.1). -5 -10 Partly because of higher import prices, inflation in many of these -15 countries has remained elevated or increased. Econometric anal- -20 ysis of exchange rate pass-through to headline inflation in 45 -25 Cumulative depreciation since May 2013 developing economies (see Special Topic) suggests that the -30 Maximum depreciation since May 2013 depreciations that have been observed in a number of middle -35 income countries has contributed directly to keeping inflation -40 Ukraine Madagascar Liberia Ghana Sudan India Rwanda Kenya Argentina Zambia Lesotho Turkey Jordan Indonesia Mauritania Brazil Kyrgyzstan Namibia Botswana Colombia Belarus Georgia Mexico Thailand Jamaica Laos Mongolia Kazakhstan Mozambique S. Africa Honduras Papua New Guinea high. Controlling for the degree of economic slack, a 10 percent depreciation (in trade weighted terms) will, on average, lead to a 3 percentage point increase in inflation (figure B1.9.2) after 10 to 11 months, before gradually dying down afterwards. Source: World Bank. Confirming previous empirical findings (Gagnon and Ihrig 2004, Reyes 2004, Schmidt-Hebbel and Tapia 2002) the analysis shows that inflation in developing countries tend to be more sen- Figure B1.9.2 A 10 percent NEER depreciation causes a 3 sitive to currency fluctuations when compared with high income percentage points increase in median inflation countries. However, inflation impacts are much smaller for devel- in developing countries after 12 months oping countries with central banks that have instituted credible Estimated pass-through rate after 12 months inflation targeting regimes — a result that suggests the im- portance of anchoring inflation expectations in maintaining price 0.5 3rd quartile stability and minimizing the inflationary impact of currency fluctua- 3rd quartile tions. Countries that have earned such credibility can more easily 0.4 3rd quartile tolerate exchange rate adjustments as a way of absorbing exter- Median nal shocks and regain autonomy in monetary policy decisions. 0.3 Median Among domestic factors conditioning the final impact of exchange Median 3rd quartile rate developments on subsequent inflation, the degree of eco- 0.2 nomic slack is crucial and can either reinforce or conversely offset 1st Quartile 1st Quartile the effect on domestic price pressures. A taxonomy of the timing 0.1 of depreciation (whether occurring in the second half of 2013 or in 1st Quartile Median the first four months of 2014) and projected output gaps in 2014 1st Quartile 0 (to assess the degree of demand-side pressures) helps to identify Developing Dev. no-peg Dev. inflation target High income countries where inflation pressures are likely to be sustained going forward, and where they are likely to fade. Inflationary pres- Source: World Bank. sures are likely to be sustained in countries where output gaps are positive or modestly negative (less than 0.5 percent of poten- tial GDP) — Quadrants I and II of figure B1.9.3. For those that Figure B1.9.3 Currency depreciations vs Output Gaps experienced continued currency pressures during 2013 and 2014, inflation pass-through effects from exchange rate deprecia- tions are likely to peak toward the end of 2014 (Argentina, Gha- na, Mongolia, Turkey and Zambia). In contrast, countries in Quadrants III and IV where negative output gaps are significant are likely to see inflation pressures abate relatively earlier. The large currency depreciations of some countries have begun to unwind as financial tensions have eased (see figure B1.9.1). All else equal, inflation pressures should begin to ease soon for countries that experienced the bulk of the depreciation during 2013 and where currency gains since the start of the year have been the most marked. For these countries, the inflation impacts associated with currency depreciations should begin to fade in the second half of 2014. Among countries, that endured signifi- cant depreciations in the first quarter of 2014 (notably, Argentina, Ghana, Ukraine or Kazakhstan), inflationary pressures are likely Source: World Bank. Data in parenthesis are maximum depreciations to keep building until they begin to subside late this year. during a particular period, and projected output gaps for 2014 (%). 29 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Global Outlook (Brazil, India, South Africa), labor markets (India, South balance sheet transactions. OECD (2009) suggests that Africa) and business climate (Brazil, India, Russia, South subsidy reform can improve household welfare in coun- Africa) have constrained GDP growth and productivity. tries where subsidies are particularly high and generate Partially as a result, middle-income country growth has large distortions. Moreover, actual fiscal savings, although disappointed in the post crisis period. differing by countries, can be substantial even after com- pensating households for the removal of subsidies. The structural reform agenda needs to be reinvigorated in order to sustain rapid income growth. The contribu- tion to potential output from capital accumulation, which has declined markedly in the post-crisis period is likely to Concluding remarks ease further as capital costs rise and international liquidity tightens. Meanwhile, demographics have turned less sup- portive: aging populations imply that growth rates in The global economic recovery remains on track, with the many middle-income countries will slow as age- acceleration in growth underpinned by firming output dependency ratios catch up to levels in advanced econo- and demand in high income countries. The economic mies and working age populations grow more slowly cycle in most developing economies is also strengthening, These trends are most advanced in developing Europe in part due to support from stronger high income de- and Central Asia, China and Thailand where demograph- mand, although growth remains slower than during the ic trends have already reached a turning point. Working pre-crisis boom period. age population growth is slowing in the rest of East Asia and in other developing regions too, with Sub-Saharan Risks to the outlook are less acute and more evenly bal- Africa a notable exception. anced than in recent years. Policy and economic adjust- ments in the wake of last summer’s turmoil have nar- All this places a greater premium on policy reforms that rowed current account deficits and reduced vulnerabili- raise productivity growth. Policymakers need to push ties in many middle-income economies. But adjustments ahead with reforms on a number of fronts, that include are not yet complete and domestic vulnerabilities persist, labor and product market and business regulation re- while policy space to counter adverse shocks and support forms that enhance competition. Financial market re- domestic activity in the face of adverse shocks is limited. form is key as well, including reducing the dominance of state-owned or controlled institutions. The relatively Developing countries need to gradually strengthen solid performance of Mexico and Philippines (who have buffers to increase their resilience to external shocks, undertaken recent policy reforms) and earlier reformers and need to more aggressively pursue structural re- Chile, Poland and Peru during the recent episodes of forms to ensure stronger growth in the medium term. global financial volatility reflects the increasing atten- Indeed in most developing countries, a further acceler- tion that financial markets are paying to developing- ation of growth (or even sustaining growth at current country fundamentals. levels which are broadly in line with potential) cannot be assured without efforts to expand capacity. In most On the fiscal front, reforms are needed to raise the quality developing regions, demographic dividends from rising of public investments in human capital and physical infra- entrants into the labor force are fading as age depend- structure. One potential avenue for creating space for ency ratios increase, weighing on potential growth. For infrastructure and education spending is through subsidy most of these countries, structural reforms are needed reforms. Quantifying the benefits of subsidy reforms is if they are to raise productivity and alleviate supply side hard, not least because these can be provided though off- bottlenecks. 30 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) References ECB. 2013. Task Force of the Monetary Policy Committee of the European System of Central Banks, “Corporate finance and economic activity in the euro area – Structural Issues Report 2013. Occasional Paper Series, No 151 Eichengreen, Barry and Gupta, Poonam, 2014. "Tapering talk : the impact of expectations of reduced federal reserve security purchases on emerging markets," Policy Research Working Paper Series 6754, The World Bank. Gagnon, J. E. and Ihrig, J. 2004, Monetary policy and exchange rate pass-through. Int. J. Fin. Econ., 9: 315–338. doi: 10.1002/ijfe.253. IMF. 2014. World Economic Outlook: Recovery Strengthens, Remains Uneven. Kennedy, Mike and Angel Palerm. 2012. “Emerging market bond spreads: The role of global and domestic factors from 2002 to 2011”. Journal of International Money and Finance, Vol 43, Issue C, pp. 70 -87. Kennedy, Mike. 2013. “Evaluating the risk to emerging market interest rate spreads of an end to quantitative easing”, mimeo. OECD. 2009.The Economics of Climate Change Mitigation: Policies and Options for Global Action and Beyond 2012, OECD Publications, Paris. Schmidt-Hebbel, K & Tapia, M. 2002. Monetary Policy Implementation and Results in Twenty Inflation -Targeting Countries, Working Papers Central Bank of Chile 166, Central Bank of Chile. Trumper, Manuel Agosin & Juan Díaz Maureira, 2012. "Sovereign Credit Risk in Latin America and Global Common Factors," Working Papers wp365, University of Chile, Department of Economics. World Bank. 2012. Global Economic Prospects: Uncertainties and Vulnerabilities. World Bank. Washington DC. World Bank. 2013A. Global Economic Prospects: Assuring Growth Over the Medium Term. World Bank. Washington DC. World Bank. 2014A Commodity Markets Outlook– April 2014. World Bank. Washington DC. World Bank. 2014B. Global Economic Prospects: Coping with Policy Normalization in High -Income Countries . World Bank. Washington DC. World Bank. 2014C. South Asia Economic Focus– Time to Refocus . World Bank. Washington DC. 31 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) The region continues to adjust to more balanced growth, while dealing with accumulated imbalances. Growth is projected to ease to 7.0 percent in 2016 reflecting offsetting effects of moderation in China and pick-up in the rest of the region as adjustment in large ASEANs eases, exports firm and tensions subside in Thailand. Volatility and eventual tightening of global financing conditions related to policy normalization and the possibility of a sharp slowdown in China, represent major risks to the regional outlook. Recent developments trend growth has thus far been resilient to sharply slower Chinese growth in the post-crisis period (figure 2.1). This reflected a combination of the diversified structures of these economies, which allowed them to Growth in the East Asia and Pacific region slowed in 2013 access new markets for their products and services, as toward a more sustainable path. Regional output expanded well as strong policy buffers, which have been used to by 7.2 percent in 2013, only slightly down from 7.4 mitigate external headwinds. percent in 2012. This reflected growth moderation in several large middle-income ASEAN economies including Indonesia and Malaysia as a result of policy tightening, and a sharp slowdown due to political Figure 2.1 Growth in East Asia has remained broadly unchanged despite a slowdown in China turmoil in Thailand. Growth in the smaller economies of the region was slightly higher or broadly unchanged, buoyed by recovering exports (Cambodia), FDI inflows and robust remittances (Myanmar, Philippines and Vietnam) and expansionary fiscal and monetary policies (Lao People’s Democratic Republic (PDR) and Mongolia). In China, GDP grew 7.7 percent, unchanged from 2012. This reflected the offsetting influences of growth support measures introduced in mid-2013 to undo the first quarter slowdown that was associated with efforts to rein in credit and rebalance the economy from credit- fueled capital investment toward consumer demand. Nevertheless, this 7.7 percent growth rate was well off Source: Haver Analytics; World Bank. China’s pre-crisis growth pace. Elsewhere in the region, 35 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 East Asia and the Pacific A stop-and-go pattern of growth in China in recent years resulted China at just over 3 percent of GDP in 2013. Both in uneven quarterly growth profile. Quarterly GDP growth in Malaysia and Indonesia raised fuel prices, as part of China has been characterized by periods of slowing broader fiscal consolidation in Malaysia and alongside growth (such as between 2013Q3 and 2014Q1) followed other supply-side measures in Indonesia. Indonesia also by stimulus-fueled accelerations such as that observed tightened monetary policy between June and November, between 2013Q1 and 2013Q3. This stop-and-go pattern whereas Thailand delayed monetary policy tightening due has reflected the tensions between short-term needs to to weak growth outcomes since it began fiscal sustain reasonably strong growth in order to assure the consolidation. Real credit growth, which had been viability of outstanding loans and sustain employment, expanding at double digit rates since mid-2011, slowed to and more medium-term objective of rebalancing growth less than 6 percent in Thailand and halved in Indonesia away from primary sectors and capital investment toward (figure 2.2). In contrast, policy turned expansionary in perhaps slower but more sustainable growth increasingly several economies hit by negative terms of trade effects reliant on services, and consumer demand. (Mongolia and Papua New Guinea). Fiscal imbalances in these economies and other smaller countries of the After a moderately slower annual growth in 2013, a slowdown of region (Lao, PDR) exceeded 5 percent of GDP in 2013. economic activity in the region continued into the first quarter of Reflecting a tight or neutral policy stance, combined with 2014. Quarterly output growth weakened across the moderate commodity prices, inflation generally remained region in the first quarter of 2014 and industrial below the upper bounds of inflation targets among production growth has remained subdued at around 2.4 inflation-targeting countries (China, Thailand, the percent in the three months to April. Barring the Philippines, Vietnam), with the notable exception of Philippines where GDP growth accelerated slightly in Mongolia. Quarterly inflation eased significantly in Q1, the pace of growth slowed in China, Indonesia, Indonesia, but annual inflation has remained above the Mongolia and Malaysia and contracted sharply in central bank targeted rate reflecting a one-off level Thailand. In addition to on-going rebalancing in China, impact from fuel price increase. this reflected a continued policy tightening in Indonesia and Malaysia, combined with depressed economic The pace of credit growth in China has also eased, but remains activity in Thailand due to ongoing political tensions as rapid. In an effort to rein in credit growth, China has well as weaker than initially anticipated external demand. tightened regulations and instructed local governments With the estimated 2.5 percent of GDP equivalent to reduce their demand for new project financing. growth support measures announced in April of 2014 in Banks have become reluctant to lend to firms in sectors China and additional targeted policy easing measures with overcapacity and domestic bond issuance has announced in May, an acceleration similar to that of slowed after widely publicized defaults. An intense recent years is expected in 2014Q2 and 2014Q3. anticorruption drive has also dampened spending (particularly on luxury items). By March of 2014, There are some signs of growth acceleration in the region. In China, industrial output growth picked-up recovered to 5.1 percent (3m/3m saar) in April, May PMIs rose to a five-month high and export growth also strengthened. Figure 2.2 Policy and administrative tightening is help- ing to slow credit growth in the region Business confidence has improved in Indonesia reflecting easing price pressures, improved current account and easing of currency pressures. Export growth rebounded sharply in Malaysia and business sentiment continues to show solid expansion in Vietnam despite the recent unrest. Thailand, where political tensions have caused a sharp slide in industrial output at a 16.5 percent annualized pace in the three months to April, continues to remain the regional outlier. Tighter policies in the larger economies of the region helped to slow credit growth across the region. Against the backdrop of still low real interest rates, policy actions implemented in the region have included monetary and fiscal tightening and some supply side measures. On average, the fiscal Source: Haver Analytics. World Bank. balance remained broadly stable for the region excluding 36 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 East Asia and the Pacific (banking sector) real credit growth eased by about 4 double digit rates observed before the 2008 crisis percentage points compared to October 2012 rates. (figure 2.3). Since the last quarter of 2013, regional However, the stock of aggregate financing remains exports expanded at double digit rates since the last high, of which about one quarter consists of shadow quarter of 2013, led by a recovery in the Euro Area banking products. Moderate inflation and stable and the US. A sustained increase in the volume of nominal policy rates implied that real interest rates in manufactured exports partly compensated for the China have remained around 4 percent throughout 2013 negative effects of declining commodity prices at the and into 2014. regional level except in some commodity exporters (Mongolia, Papua New Guinea). The drivers of growth are shifting away from investment and public consumption towards net exports with private consumption The regional current account surplus has begun to stabilize after remaining resilient, reflecting domestic adjustment in the context of falling to its lowest level in 2013 in more than a decade (Table changing global conditions. Tightening financial conditions in 2.1). The improvement which started in the third quarter much of 2013 prompted by deteriorating terms of trade, of 2013 has been slow partly reflecting temporary dip in tighter global financing conditions and policy measures import demand in the US due to extreme weather to rein in credit growth have contributed to a cyclical conditions, as well as the correction of earlier over- slowdown outside China, including a halving in invoicing of exports in China, and smoothing of investment growth for the region excluding China (to 4.8 Indonesia’s export data which was flattered in the last percent in 2013, the lowest since 2009). In China, quarter of 2013 due to front-loading of unprocessed continued growth-support measures have delayed mineral exports ahead of the January trade ban. domestic rebalancing, with investment remaining the main driver of growth. Nevertheless, adjustment is The tightening of global financial conditions and domestic policies in underway with the investment contribution to output the wake of the financial market turbulence of May-July 2013 have growth easing to around 53 percent in 2013 compared helped reduce vulnerabilities. In particular, (i) current account with a record high 88 percent in 2009. balances have improved (Indonesia and Thailand), (ii) real credit growth has moderated towards more Regional consumption has proved to be resilient, with the notable sustainable rates (across the region) and (iii) price exception of Thailand. In China, the contribution of pressures have eased (Indonesia). Partly as a result of consumption to GDP growth has continued to rise, these adjustments, regional economies were less affected despite a temporary set-back in 2013, with the trend than other emerging markets outside the region by the particularly pronounced in the first quarter of 2014. market sell-off that occurred in January-February 2014, Consumption growth also accelerated in Indonesia, triggered by concerns over default risks in China, a sharp where increased transfers partly compensated for real devaluation in Argentina and escalating political tensions income losses due to a 33 percent increase in fuel prices. in Eastern Europe. In Malaysia, robust income growth helped support household consumption, despite slowing credit growth and fiscal consolidation. Consumption growth inched down but remained robust in the Philippines, supported Figure 2.3 Decline in domestic demand led to easing of demand for imports by remittances, which grew 7.4 percent from a year ago in 2013. In Thailand public and private consumption growth plummeted, reflecting deteriorating consumer sentiment combined with a reduction in budgetary outlays on consumer subsidies. Net exports emerged as a positive contributor to regional output growth in 2013. Moderation of domestic demand combined with the upturn in high-income country growth, and currency depreciations in some countries in response to the turmoil during the May-July of 2013, turned net exports into a positive (although still small) contributor to regional growth. Import volume growth in the region excluding China slowed to the slowest pace observed since 2009. In China, import Source: IMF, IFS; World Bank. growth accelerated but still remained well below the 37 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 East Asia and the Pacific Table 2.1 Net capital flows to East Asia and the Pacific ($billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Capital Inflows 193.1 309.5 627.4 621.2 476.9 664.2 699.5 701.9 701.9 Foreign direct investment 226.4 189.9 320.0 386.5 367.2 370.9 375.0 382.5 390.4 Portfolio investment -14.7 51.3 90.3 39.6 114.2 83.3 111.1 108.9 106.3 Equity -6.8 31.6 51.7 13.7 49.9 30.2 45.7 49.6 54.2 Debt instruments -7.9 19.7 38.7 25.9 64.3 53.1 65.4 59.3 52.1 Other investment* -18.6 68.3 217.0 195.1 -4.5 210.0 213.4 210.5 205.2 o/w Bank lending 15.5 -4.1 17.2 24.4 28.6 41.2 38.6 41.9 44.3 Short-term debt flows -13.3 65.0 148.9 145.1 56.7 62.8 83.4 94.3 102.4 Official inflows -0.4 3.9 4.0 -0.4 3.3 11.1 -0.1 -1.3 -1.9 World Bank 1.2 2.2 2.7 0.9 1.0 0.2 .. .. .. IMF 0.0 0.1 0.0 0.0 -0.1 -0.3 .. .. .. Other official -1.5 1.6 1.3 -1.3 2.3 0.5 .. .. .. Memo items (as a percentage of GDP) Current account balance 7.7 4.8 3.7 1.9 2.0 1.5 1.8 2.0 1.9 Capital inflows 3.3 4.9 8.3 6.7 4.8 6.1 5.9 5.4 5.0 Capital outflows 2.8 2.0 3.4 3.6 4.3 3.0 .. .. .. Source: World Bank. * including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. Note: e = estimate, f = forecast. Capital flows and risk appetite have recovered from earlier volatility and borrowing costs have fallen led by declining Outlook spreads. Following a sharp fall in February of 2014, capital flows have since rebounded strongly. Indonesian Rupiah and Thai Baht, two regional The outlook for the East Asia and the Pacific region remains currencies that had been hardest hit during the influenced by the pace of rebalancing in China, volatility and the financial market turbulence of May-July 2013, began eventual tightening of external financing conditions as monetary policy is recouping their earlier losses although they remain normalized in high-income countries, and a recovery in global demand weaker than a year ago in both nominal and effective for exports. Despite weak GDP growth in the first quarter of terms. The Thai Baht came under renewed pressures in this year, improving global economic activity, growth mid-May of 2014 reflecting political uncertainty related supporting measures in China, easing policy adjustment in to the political intervention by the Thai army. As the other large middle income economies of the region political situation began to settle, pressures on the Baht including Indonesia and Malaysia, and abating of tensions in eased. Similarly, stock markets recovered in early 2014, Thailand are expected to provide support to growth in the but several remain well below their levels a year ago region in the second half of 2014. Overall growth in the (especially Indonesia and Thailand) (figure 2.4). Recent region is expected to slow marginally to around 7.0 percent political tensions have eroded a 7.3 percent gain of the toward the end of the forecast period (table 2.2). This is first four months of 2014 in Vietnam, which reflected about 2 percentage points slower than during the pre-crisis strong foreign inflows. Sovereign bond spreads in the years but broadly in line with the regional potential output, region have declined reflecting improved fundamentals reflecting a gradual dissipation of large positive output gaps combined with renewed global risk appetite . (figure that had characterized the region in the aftermath of the 2.5). Vietnam has seen the largest gains with spreads global crisis. With demand still broadly in line with potential, easing about 200bp below their early-2013 levels, there is little scope for a sharp and sustained acceleration in reflecting lower inflation and financial stabilization, regional growth without re-generating potential imbalances. including the containment of non-performing loans. Moreover, large stocks of debt accumulated during the years Recent political tensions, if continued, may however of credit-fueled investment-led growth will continue to reverse recent improvements. weigh on regional outlook. 38 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 East Asia and the Pacific Table 2.2 East Asia and the Pacific forecast summary (annual percent change unless indicated otherwise) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b GDP at market prices 8.0 9.6 8.3 7.4 7.2 7.1 7.1 7.0 (Sub-region totals-- countries with full NIA + BOP data)c GDP at market pricesc 8.0 9.6 8.3 7.4 7.2 7.1 7.1 7.0 GDP per capita (units in US$) 7.2 8.9 7.6 6.7 6.5 6.4 6.5 6.4 PPP GDP 7.8 9.5 8.1 7.4 7.1 7.0 7.0 6.9 Private consumption 5.9 7.3 9.1 7.6 6.8 7.3 7.5 7.6 Public consumption 7.4 9.6 8.8 8.4 7.5 7.4 7.4 7.5 Fixed investment 10.7 11.4 8.6 9.5 7.9 6.9 6.9 6.7 d Exports, GNFS 9.0 22.2 5.3 3.2 4.9 7.3 7.5 7.5 d Imports, GNFS 8.5 18.4 6.4 5.1 6.7 7.4 8.1 8.0 Net exports, contribution to growth 0.4 1.6 -0.1 -0.5 -0.4 0.1 0.0 0.0 Current account bal/GDP (%) 4.7 3.7 1.9 2.0 1.5 1.8 2.0 1.9 GDP deflator (median, LCU) 5.7 6.1 4.4 3.0 4.5 5.6 5.2 4.9 Fiscal balance/GDP (%) -1.8 -1.6 -1.3 -1.8 -2.2 -2.1 -2.1 -2.1 Memo items: GDP East Asia excluding China 4.3 6.9 4.7 6.3 5.3 5.0 5.6 5.5 China 9.4 10.4 9.3 7.7 7.7 7.6 7.5 7.4 Indonesia 4.6 6.2 6.5 6.3 5.8 5.3 5.6 5.6 Thailand 3.5 7.8 0.1 6.5 2.9 2.5 4.5 4.5 Source: World Bank. a. Growth rates over intervals are compound weighted averages; average growth contributions, ratios and deflators are calculated as simple averages of the annual weighted averages for the region. b. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. c. Sub-region aggregate excludes Fiji, Myanmar and Timor-Leste, for which data limitations prevent the forecasting of GDP components or Balance of Payments details. d. Exports and imports of goods and non-factor services (GNFS). Figure 2.4 Despite some rebound, asset prices remain Figure 2.5 Sovereign bond yields have narrowed around or below early-2013 levels recently Source: Bloomberg. World Bank. Source: Bloomberg. World Bank. 39 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 East Asia and the Pacific Growth in China is expected to moderate, but the adjustment to more balanced growth will continue to pose challenges. Growth Risks in China is expected to ease to 7.6 percent in 2014 and further to 7.5 percent in 2015 and 7.4 percent in 2016, reflecting the ongoing rebalancing of the economy. The risks for the region are broadly balanced. Volatility and The process is expected to remain slow and volatile as eventual tightening of financing conditions related to the adjustment-induced slowing is offset by loosening normalization of monetary policy in the U.S., a bumpy fiscal and monetary policies —aimed at meeting annual recovery of global demand for imports, and a sharper growth targets. than expected slowdown in China present three major risks to the regional outlook. Conversely, sharper-than- Outside of China, regional growth is projected to slow expected recovery of global demand for imports and somewhat in 2014 as a result of domestic policies tightening successful adjustment in China represent upside risks for and political tensions. In Indonesia, growth will ease to the regional outlook. 5.3 percent in 2014 as the economy adjusts to tighter financing conditions, before stabilizing at 5.6 percent The current benign external financing environment may in 2015 and 2016 on the back of recovering exports. weaken incentives to implement domestic reforms. Although In Thailand, output growth is projected to slow global financial conditions have eased considerably further in 2014, and the outlook remains uncertain since September of last year, they are expected to due to continued political tensions. In contrast, eventually tighten as the recovery in the US and the Vietnam is projected to continue to benefit from Euro Area solidifies. This will weigh on the regional recovering global demand due to improved outlook through higher costs of capital and higher macroeconomic fundamentals, including improved interest payments especially in the countries where price stability with GDP growth expected to increase outstanding stocks of debt remain high (Thailand, modestly, but steadily to reach 5.8 percent by 2016. China, Malaysia) (figure 2.6). In addition, the benefits However recent political tensions have introduced of economic flexibility in East Asia and Pacific that some uncertainty to the outlook. A projected have supported growth over the past half-decade, will acceleration of growth in the Philippines, in 2015 increasingly dissipate. Structural reforms are needed reflects accelerated reconstruction efforts. Overall, to rejuvenate potential growth (e.g. trade facilitation aggregate growth for the region excluding China is measures, removing impediments to foreign direct projected to settle at around 5.5 percent by 2016 as investment, especially in services sectors). As financial external demand solidifies, the domestic adjustment conditions ease in the short-term, political process comes to an end and Thailand recovers from commitment to continue implementing policies that political crisis. In particular, growth in the ASEAN-4 strengthen potential growth and reduce vulnerabilities is projected to track potential output. could weaken. The smaller economies are expected to grow steadily, but face risks from domestic overheating and China’s rebalancing. Growth in Cambodia and Myanmar is projected to remain stable, Figure 2.6 Large stocks of private sector debt represent the sources of financial vulnerability benefitting from higher global import demand and regional and global integration. The baseline forecasts for Percent of GDP 200 Households Lao, PDR projects a slight increase in growth, assuming 180 strong reform efforts combined with the start of 160 Non-financial corporate production of new power projects. Growth in Mongolia 140 envisages a gradual slow-down to 7.4 percent by 2016 120 reflecting overdue policy tightening to unwind large 100 domestic and external imbalances generated during the 80 years of expansionary policies. Papua New Guinea faces 60 40 a slowdown in the non-mineral sector as construction 20 winds down on the huge liquefied natural gas project. 0 The outlook for Timor-Leste’s non-oil economy has 10Q3 11Q1 11Q3 12Q1 12Q3 13Q1 13Q3 10Q3 11Q1 11Q3 12Q1 12Q3 13Q1 13Q3 10Q3 11Q1 11Q3 12Q1 12Q3 13Q1 13Q3 10Q2 10Q4 11Q2 11Q4 12Q2 12Q4 13Q2 moderated significantly as public spending plans have China Malaysia Thailand Indonesia been brought down to more sustainable levels in order to curb inflation. In the smaller Pacific Island countries, Source: BIS. IMF, IFS. World Bank. Bank Negara Malaysia. For Malaysia, annual household debt series are interpolated to get quarterly estimates. growth is expected to be subdued and volatile. 40 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 East Asia and the Pacific While the smooth adjustment to eventual policy tightening remains gradual and protracted. However, political pressures for the most likely outcome, bouts of capital flow reversals and other sustainable growth may encourage a faster forms of financial market volatility remain a risk. Further transformation (see EAP economic update, April 2014). episodes of volatility can be anticipated, as markets approach high-income monetary policy decision points, The recovery in advanced markets presents both upside and notably whether to embark on a more aggressive easing downside risks. Although the region is currently trading strategy in the Euro Area, and when to begin tightening more with developing countries rather than advanced conventional monetary policy in the United States. How economies, the industrial countries remain major markets well the regional economies will be able to navigate for the region’s exports, with the United States, the Euro further episodes of volatility will depend on the strength area, Japan, and Australia and New Zealand accounting of domestic economies and the robustness of policy for about two-fifths of the region’s exports (EAP buffers and flexibility of policy tools available to counter economic update, April 2014). In the baseline scenario, possible external shocks. While the adjustment that has slowing import demand from China is expected to be occurred thus far has reduced vulnerabilities within the more than offset by rising import demand from the US region, a domestic crisis elsewhere in the developing and the Euro Area. Every 1 percentage point increase in world could have regional consequences if contagion high income growth and a corresponding slowdown in effects take hold. Similarly, domestic tensions like China is expected to translate into an increase in growth political impasse or electoral uncertainty could reinforce by 0.22 percentage points in East Asia (excluding China). external shocks and contribute to greater fragility than In the baseline scenario, growth in global trade volumes warranted by economic fundamentals. is expected to accelerate from 3.0 percent in 2013, to 4.4 percent this year, rising to about 5.0 per-cent in 2016 A sharper than expected slowdown in China triggered by disorderly benefitting the manufacturing intensive economies of unwinding of imbalances, would generate substantial headwinds in East Asia with close trade linkages to the U.S. and Euro the region. While trend growth in the region has not been Area. In value terms, this pick-up is considerably slower affected by slowing growth in China, cyclical growth than in pre-crisis years, mainly reflecting the fall in global remains closely tied to developments in China. In the food prices and metal prices and broadly stable energy process of rebalancing the Chinese economy, an prices in recent years. A faster-than-expected recovery in unexpectedly sharp adjustment of property prices and advanced markets would accelerate the recovery in global disorderly deleveraging could lead to a significant fall in trade whereas a slower-than-expected recovery or investment rates, an abrupt slowdown in output growth, protectionist measures or tighter financial conditions, and substantial spillovers within the East Asia region, including inadequate trade finance, would have a negative especially on commodity exporters (January 2013 GEP) . impact on the regional outlook. Successful economic rebalancing in China presents an upside risk to Food price risks are on the upside. Tensions in Eastern the region. The Chinese authorities have announced their Europe combined with El Niño phenomenon, which intention to implement reforms in labor, land and capital appears increasingly likely this year, and could cause markets, and gradually unwind imbalances generated considerable damage on crop yields, exert pressures on during the years of credit-fueled investment led growth. food prices (see Chapter 1 and commodity Annex for These reforms will eventually lead to improved resource more detailed discussion) and cause spikes in consumer allocation and higher productivity by increasing the role price inflation. Meanwhile. robust supply and weakening of market forces in the economy, containing the near- Chinese demand will continue to weigh on metals prices, term risks to financial stability posed by rapid credit while increased supply from the Middle-East could exert growth and high levels of debt, and helping China’s downward pressure on energy prices benefitting energy transition to a slower, but more sustainable growth path. importers, while generating further headwinds for metal The baseline projection assumes that the domestic and/or energy exporters (Mongolia, Papua New Guinea, rebalancing from investment to consumption will be Indonesia, Malaysia, Vietnam). 41 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table 2.3 East Asia and the Pacific country forecasts 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Cambodia GDP at market prices (% annual growth)b 7.4 6.0 7.1 7.3 7.4 7.2 7.0 7.0 Current account bal/GDP (%) -4.5 -6.9 -7.9 -10.1 -9.4 -9.7 -10.0 -10.3 China GDP at market prices (% annual growth)b 9.4 10.4 9.3 7.7 7.7 7.6 7.5 7.4 Current account bal/GDP (%) 5.2 4.0 1.9 2.6 2.0 2.2 2.3 2.3 Fiji GDP at market prices (% annual growth)b 1.3 0.1 1.9 2.2 2.7 2.4 2.4 2.3 Current account bal/GDP (%) -6.8 -4.0 -4.9 -1.0 -16.4 -6.3 -6.6 -6.9 Indonesia GDP at market prices (% annual growth)b 4.6 6.2 6.5 6.3 5.8 5.3 5.6 5.6 Current account bal/GDP (%) 2.2 0.7 0.2 -2.8 -3.3 -2.7 -2.1 -2.0 Lao PDR GDP at market prices (% annual growth)b 6.2 8.5 8.0 8.2 8.1 7.2 7.9 9.1 Current account bal/GDP (%) -2.3 -8.4 -10.3 -15.0 -20.8 -19.9 -18.2 -16.4 Malaysia GDP at market prices (% annual growth)b 3.9 7.4 5.1 5.6 4.7 4.9 5.0 5.0 Current account bal/GDP (%) 12.6 10.9 11.6 6.1 3.8 3.5 5.1 5.1 Mongolia GDP at market prices (% annual growth)b 5.8 6.4 17.5 12.4 11.7 10.0 8.8 7.4 Current account bal/GDP (%) -3.6 -14.3 -31.5 -32.8 -27.5 -16.5 -11.8 -10.4 Myanmar GDP at market prices (% annual growth)b 9.7 5.3 5.9 7.3 7.5 7.8 7.8 7.8 Current account bal/GDP (%) -0.7 -1.3 -2.6 -4.1 -4.4 -4.8 -5.1 -4.8 Philippines GDP at market prices (% annual growth)b 4.0 7.6 3.6 6.8 7.2 6.6 6.9 6.5 Current account bal/GDP (%) 1.2 4.5 2.5 2.8 3.5 2.0 2.2 2.4 c Papua New Guinea GDP at market prices (% annual growth)b 3.0 8.0 9.0 8.7 4.4 10.0 20.0 4.0 Current account bal/GDP (%) 3.2 -6.7 -1.4 -51.0 -27.0 -2.0 12.3 9.3 Samoa GDP at market prices (2005 US$)b 2.8 0.5 1.4 2.9 -0.3 1.6 1.9 1.8 Current account bal/GDP (%) -8.0 -7.6 -4.1 -9.2 -2.3 -6.1 -5.6 -5.0 Solomon Islands GDP at market prices (% annual growth)b 2.8 7.0 9.1 4.9 3.1 3.5 3.5 3.5 Current account bal/GDP (%) -14.8 -31.0 -14.4 -15.0 -12.0 -13.0 -12.4 -11.9 Thailand GDP at market prices (% annual growth)b 3.5 7.8 0.1 6.5 2.9 2.5 4.5 4.5 Current account bal/GDP (%) 3.3 3.1 1.2 -0.4 -0.7 1.3 1.0 1.0 d Timor-Leste GDP at market prices (% annual growth)b 3.3 9.5 12.0 8.3 8.1 8.0 7.7 8.6 Current account bal/GDP (%) 17.1 39.8 40.4 43.5 34.3 32.1 27.0 27.7 Vanuatu GDP at market prices (2005 US$)b 2.8 1.6 1.2 1.8 2.8 3.2 3.2 3.2 Current account bal/GDP (%) -3.1 -5.0 -7.3 -6.4 -4.4 -4.6 -4.9 -5.8 Vietnam GDP at market prices (% annual growth)b 5.9 6.4 6.2 5.3 5.4 5.5 5.6 5.8 Current account bal/GDP (%) -10.0 -3.8 0.2 5.8 6.5 4.5 2.1 1.1 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. Samoa; Tuvalu; Kiribati; Democratic People's Republic of Korea; Marshall Islands; Micronesia, Federated States; N. Mariana Islands; Palau; and Tonga are not forecast owing to data limitations. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. GDP measured in constant 2010 U.S. dollars. c. The start of production at Papua New Guinea Liquefied Natural Gas (PNG-LNG) is expected to boost GDP growth to 20 percent and shift the current account to a 9 percent surplus in 2015. The country's GDP deflators are expected to be updated in 2014 and the new GDP series is expected to be significantly different from the existing one. d. Non-oil GDP. Timor-Leste's total GDP, including the oil economy, is roughly four times the non-oil economy, and highly volatile, subject to global oil prices and local production levels. EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Europe and Central Asia EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) A diverging recovery is underway in the developing Europe and Central Asia region. The recovery in the Euro Area is boosting exports in Central and Eastern Europe. For the countries further east, which are highly exposed to weakening activity in Russia and declining commodity prices, near-term prospects have weakened. An escalation of political tensions between the EU and Russia is a key downside risk to the regional forecasts. Recent developments increased to 4.0 percent in 2013 from 3.4 percent in 2012, as solid energy prices supported growth in energy exporters and fiscal policy loosened in several countries. For the broader geographical region including recently- A modest, external demand-driven recovery is underway in high-income countries,4 average growth slowed to 2.2 developing Europe and Central Asia.1 Growth in developing percent in 2013 (from 2.3 percent in 2012) as the Europe and Central Asia picked up in 2013, averaging 3.6 recovery in most countries suffered a setback from percent, up from 1.9 percent in 2012 (table 2.4 and figure sluggish growth in domestic demand. 2.7). Robust activity in core Euro Area countries and a winding down of earlier fiscal consolidation lifted growth in the developing Central and Eastern Europe sub- region2 to 2.2 percent in 2013 from -0.3 percent in 2012. Figure 2.7 Growth in the developing Europe and Central Asia region continues to strengthen Good agricultural harvests provided additional momentum in Hungary, Moldova, Romania, and Serbia. In most countries in the sub-region, the pickup in growth narrowed substantially negative output gaps. Growth in the developing Commonwealth of Independent States 3 1. Countries in developing Europe and Central Asia region include only the low- and middle-income countries of the geographic region. See also footnote 2 and 3. 2. Countries in the developing Central and Eastern Europe sub-region are Albania, Bosnia and Herzegovina, Bulgaria, Georgia, Hungary, Kosovo, Macedonia FYR, Montenegro, Romania, and Serbia. 3. Countries in the developing Commonwealth of Independent States sub-region are Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyz Republic, Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. 4. These include Croatia, the Czech Republic, Estonia, Latvia, Lithuania, Source: Datastream, World Bank. Poland, Russian Federation, Slovenia, and Slovak Republic. 43 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Europe and Central Asia In developing Central and Eastern Europe, growth is increasingly Figure 2.8 Growth in developing Central and Eastern driven by the recovery in advanced Europe. In early 2014, Europe has been export-driven industrial production and business sentiment generally Percent in 2013 6 Contribution of Net Exports pointed to strengthening activity across Central and 5 Contribution of Domestic Demand Eastern Europe, as the recovery in Central Europe began Total GDP growth 4 to feed through the supply chain in Eastern Europe 3 (figure 2.8). On average, rising import demand from 2 advanced Europe contributed to export growth of 11.5 1 percent in March on a year-on-year basis, led by 0 Hungary, Romania, and Turkey. Notwithstanding market -1 concerns and significant monetary policy tightening in -2 early 2014, Turkey’s industrial output continued to -3 expand in the first three months of the year, helped by strong export growth. But momentum has slowed, and slides in business and consumer confidence suggest softening of domestic demand ahead. Source: Datastream, World Bank. In contrast, among the developing Commonwealth of Independent States, trading partner slowdowns, geopolitical tensions, declining Figure 2.9 Industrial production is slowing in the devel- metal and mineral prices, and domestic capacity constraints have oping Commonwealth of Independent States slowed growth in 2014. Monthly industrial production data for Kazakhstan, Ukraine, and Russia indicates sharp slowdowns in early 2014 (figure 2.9). Notwithstanding fiscal expansion and continued monetary accommodation, growth in Kazakhstan moderated as activity slowed in the country’s main trading partners— Russia and China —and reflecting further delays in bringing additional oil production capacity onstream. In Ukraine, escalating tensions with Russia and domestic political instability contributed to a 12.5 percent (q/q saar) contraction in Q1 GDP (see Box 2.1). Elsewhere in the sub-region, terms of trade deteriorated substantially. In particular, prices of industrial metals and minerals declined by 4.4 percent since end-2013 Source: Datastream, World Bank. and those of raw materials by 5.5 percent (energy prices were down by 0.5 percent). The net impact of terms of trade deteriorations are estimated to potentially reduce Figure 2.10 Developing Commonwealth of Independent GDP in 2014 by 2.2 to 2.5 percent in Tajikistan and States are exposed to slowing Russia and Kyrgyz Republic, and by 0.2 to 0.5 percent in Armenia declining commodity prices Percent Percent of GDP and Kazakhstan (figure 2.10). 100 Non-oil commodity exports in 2013 (percent of total exports) 25 Exports to Russia in 2013 (percent of GDP), RHS The generally accommodative monetary policy stance of 2013, 80 20 with policy rates at historical lows in many countries, persisted 60 15 through 2014 in most countries. Cuts in policy rates or the bottoming out of deflation have begun to reduce real 40 10 policy rates in several countries. Exceptions were Georgia, Ukraine, and initially Turkey, where monetary 20 5 policy tightened in early 2014 against the backdrop of rising credit growth, inflation and depreciation 0 0 pressures. Turkey unexpectedly cut its benchmark interest rate in May by 50 basis points despite rising inflation (see below), based on the expectation that Source: COMTRADE, IMF Direction of Trade. inflation should decelerate later this year because of slowing domestic demand. 44 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Europe and Central Asia The fiscal policy stance eased in many countries in the region. In Capital flows in developing Europe and Central Asia declined developing Central and Eastern Europe, earlier fiscal especially among the larger countries in the region. Gross tightening ended or was partially reversed in 2013. capital flows to developing Europe and Central Asia Modest fiscal consolidation continued in Bosnia and fell by 42 percent to $26 billion during the first five Herzegovina, Macedonia FYR, and Serbia where sizeable months of 2014 compared to the same period a year fiscal deficits have yet to be unwound. In the developing earlier. Although several countries succeeded in placing Commonwealth of Independent States, fiscal deficits modest-sized bond issues in the first five months of generally increased despite robust real GDP growth 2014, issuance was down sharply, especially in (Azerbaijan, Tajikistan, Uzbekistan). In contrast, Georgia Kazakhstan, Turkey, and Ukraine. Equity issuance succeeded in containing the fiscal deterioration in 2013 dried up entirely in early 2014, as the weakness of 2013 despite a sharp growth slowdown. persisted. Syndicated bank lending halved to $8 billion, with the drop in banking flows to Turkey (and, to a Several countries have come under market pressure as a result of lesser extent, Kazakhstan) accounting for the bulk of increasing investor concerns about high external debt and political the reduction. Anecdotal evidence suggests that tensions. The Turkish lira depreciated nearly 8 percent outflows from Russia (estimated at $64 billion during against the dollar in January, but an aggressive tightening the first quarter) may be diverted into other developing of monetary policy in the same month has helped economies, in particular Turkey. stabilize the currency. The Hungarian forint depreciated by 7 percent also in January amid continuing investor Remittance inflows from Russia were resilient and helped finance concerns about economic policies that discourage FDI current accounts and domestic activities in a number of countries compounded by pressures on emerging market in developing Commonwealth of Independent States. A resilient currencies more broadly. The Ukrainian hryvnia labor market despite the growth slowdown in Russia depreciated by 40 percent during the first four months of helped generate an increase in aggregate remittance 2014 as large current account deficits and high external flows from Russia to the sub-region by 16.8 percent in debt amid escalating domestic political and geopolitical Q4 2013 year-on-year. Average year-on-year growth tensions undermined investor confidence. In part to rates of 20-25 percent were maintained in most avert a loss of competitiveness against their main trading recipient countries (Armenia, Azerbaijan, Kazakhstan, partner’s currency, both Kazakhstan—which is a Kyrgyz Republic, and Turkmenistan) —except in member of the Eurasian Customs Union with Russia and Ukraine where remittances from Russia dropped from Belarus — and Kyrgyzstan allowed double-digit the equivalent of US$900mn in the previous year to devaluation and depreciations in February 2014. near-zero in Q3 2013. Inflation has picked up in countries with substantial depreciations or domestic demand pressures, but remained well below target in countries with significant slack in labor markets. Masking diverging Outlook inflation trends within the region, average inflation in the region rose to 10.2 percent in the first four months of 2014 from 5.7 percent in a year earlier; however, this was driven After expanding by an estimated 3.6 percent in 2013, GDP by persistent high inflation in several large countries. In growth for the region is projected to temporarily weaken in 2014 Turkey, in particular, inflation has risen sharply and reached owing to a sharp slowdown in a number of large economies in the 9.4 percent in April. Further rises are likely following the region, including Turkey, Kazakhstan, and the Ukraine. central bank’s decision in late May to cut its main policy rate Growth in 2014 is expected to average 2.4 percent by 50 basis points. In Belarus, Kyrgyz Republic, Uzbekistan before picking up again to 3.7 and 4.0 percent in 2015- and Ukraine, inflation also remained high driven by fiscal 16. The slowdown in 2014 will be more marked in pressures and high credit and real-wage growth (Belarus, developing Commonwealth of Independent States, Uzbekistan) and the pass-through of recent depreciations driven by weaker growth of the two largest economies (Kyrgyz Republic, Ukraine). The opposite was the case in (Kazakhstan and Ukraine) as a result of slowdowns in much of high-income and developing Central and Eastern Russia and China —the sub-region’s important trading Europe where negative output gaps and labor market slack and investment partners —and a weakening trend in key helped keep inflation well below target levels or even commodity prices. negative on a year-on-year basis. Slowing food price inflation helped dampen inflation in a number of smaller economies Developing countries in Central and Eastern Europe are in the developing Commonwealth of Independent States expected to see recoveries in growth in 2014 as they continue to (e.g., Armenia and Tajikistan). benefit from strengthening import demand from the Euro Area. 45 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Europe and Central Asia Table 2.4 Europe and Central Asia forecast summary (annual percent change unless indicated otherwise) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b GDP at market prices 4.0 5.9 6.2 1.9 3.6 2.4 3.7 4.0 (Sub-region totals-- countries with full NIA + BOP data) c GDP at market pricesc 4.0 6.0 6.3 1.9 3.6 2.3 3.6 3.9 GDP per capita (units in US$) 3.6 5.2 5.5 1.2 2.8 1.6 3.0 3.3 PPP GDP 4.3 5.8 6.0 2.0 3.5 2.2 3.7 3.9 Private consumption 4.7 4.4 7.0 1.4 4.8 1.9 3.5 4.1 Public consumption 3.0 0.4 2.9 4.3 2.9 4.3 4.7 3.7 Fixed investment 5.0 11.1 10.3 -0.7 3.2 -0.2 7.3 7.9 Exports, GNFSd 5.0 8.3 8.7 4.0 2.2 4.2 5.5 5.3 Imports, GNFSd 5.3 12.5 11.3 1.5 4.9 2.5 6.1 6.8 Net exports, contribution to growth -0.1 -1.5 -1.1 0.9 -1.1 0.6 -0.4 -0.8 Current account bal/GDP (%) -3.7 -3.2 -4.2 -3.7 -4.3 -3.3 -3.8 -3.9 GDP deflator (median, LCU) 9.4 8.5 8.6 3.4 2.8 5.0 5.5 4.5 Fiscal balance/GDP (%) -4.5 -2.6 0.4 -0.5 -1.3 -1.4 -1.6 -1.5 Memo items: GDP Broader geographic region 4.0 4.7 4.9 2.3 2.2 1.7 2.7 3.2 (incl. recently high income countries)e Central and Eastern Europef 3.4 0.3 2.0 -0.3 2.2 2.5 2.9 2.8 g Commonwealth of Independent States 6.6 6.1 6.0 3.4 4.0 2.2 4.6 4.9 Kazakhstan 7.5 7.3 7.5 5.0 6.0 5.1 5.9 6.0 Turkey 3.0 9.2 8.8 2.1 4.0 2.4 3.5 3.9 Romania 4.4 -0.9 2.3 0.4 3.5 2.8 3.2 2.9 Source: World Bank. a. Growth rates over intervals are compound weighted averages; average growth contributions, ratios and deflators are calculated as simple averages of the annual weighted averages for the region. b. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. c. Sub-region aggregate excludes Bosnia and Herzegovina, Kosovo, Montenegro, Serbia, Tajikistan and Turkmenistan. Data limitations prevent the forecasting of GDP components or Balance of Payments details for these countries. d. Exports and imports of goods and non-factor services (GNFS). e. Recently high-income countries include Croatia, Czech Republic, Estonia, Latvia, Lithuania, Poland, Russian Federation, and Slovak Republic. f. Central and Eastern Europe: Albania, Bosnia and Herzegovina, Bulgaria, Georgia, Kosovo, Lithuania, Macedonia, FYR, Montenegro, Romania, Serbia. g. Commonwealth of Independent States: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyz Republic, Moldova, Tajikistan, Turkmenistan, Ukraine, Uzbekistan. GDP growth in the sub-region is expected to reach 2.5 In Hungary and Romania, in contrast, there are clearer percent in 2014 and 2.8-2.9 percent in 2015-16, up from signs that stronger external demand is spilling over into -0.3 percent in 2013. External demand will remain the improvements in the labor market and recoveries in key driver of growth in Bulgaria, Bosnia and domestic demand. In general across the region, low Herzegovina, Macedonia FYR, and Serbia where inflation will allow central banks to maintain consumer and business confidence remain low over accommodative policies to support the recoveries in lingering political uncertainty, chronically high domestic demand. unemployment, and still fragile banking systems saddled with high nonperforming loans (NPLs). Confidence and In Turkey, the growth outlook has deteriorated in light domestic demand are further curtailed by severe of tighter global financial conditions and reduced weather affecting a large area of Southeastern Europe, emerging market capital flows. Whereas recent activity especially Serbia and Bosnia and Herzegovina, causing indicators have pointed to surprise resilience in the floods and landslides, dislocating several thousand economy mainly thanks to buoyant export demand, people, and inundating mines, agricultural lands, energy consumer confidence and domestic demand are slowing and production facilities. with higher inflation and the depreciated lira 46 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Europe and Central Asia Table 2.5 Net capital flows to Europe and Central Asia ($billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Capital Inflows 277.3 60.2 95.4 125.6 118.1 118.3 132.1 151.5 158.5 Foreign direct investment 164.0 45.7 18.3 69.4 60.4 41.3 39.2 44.3 49.5 Portfolio investment -6.9 -0.4 44.0 33.5 51.4 47.8 44.5 43.7 41.8 Equity -0.4 3.7 3.7 -0.7 8.1 2.1 4.3 5.2 6.4 Debt instruments -6.5 -4.0 40.3 34.1 43.4 45.7 40.2 38.5 35.4 Other investment /a 120.3 14.8 33.1 22.7 6.3 29.2 48.4 63.5 67.2 o/w Bank lending 132.3 14.2 -18.9 33.0 8.0 16.0 15.3 19.7 22.7 Short-term debt flows 5.7 -9.9 41.6 14.1 9.0 13.1 19.5 24.5 30.4 Official inflows 24.6 49 28 6.9 -6.9 5.1 13.0 15.0 10.0 World Bank 1.2 3.4 3.9 2.9 2 3.1 .. .. .. IMF 12.8 25.5 9 -1 -13 -4 .. .. .. Other official 10.6 20.2 15.1 5.1 4 6 .. .. .. Memo items (as a percentage of GDP) Current account balance -5.2 -2.4 -3.6 -4.6 -4.0 -4.8 -3.6 -4.1 -4.2 Capital inflows 18.5 4.9 6.7 7.9 7.3 6.9 8.0 8.4 8.0 Capital outflows 9.9 1.4 1.4 2.6 3.2 1.8 .. .. .. Memo items: capital inflows including recently transitioned to high income economies ($ billions) /b Capital Inflows 459.6 122.1 218.2 246.8 249.9 279.6 255.1 265.1 284.4 Foreign direct investment 275.5 106.4 91.0 152.5 131.8 125.1 120.4 127.3 138.5 Portfolio investment -38.2 33.7 88.2 49.1 108.2 63.8 69.6 69.5 73.4 Equity -16.7 8.8 6.8 -7.4 12.6 -2.8 11.1 9.3 10.2 Debt instruments -21.5 24.9 81.4 56.5 95.5 66.6 58.5 60.2 63.2 Other investment /a 222.4 -18.1 39.0 45.3 10.0 90.7 65.1 68.3 72.5 Source: World Bank. /a including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. /b including Croatia, Czech Republic, Estonia, Latvia, Lithuania, Poland, Russia Federation, and Slovak Republic Note: e = estimate, f = forecast. constraining private consumption and investment. 2014 (1 percent below the 2013 average), oil output in Slower domestic demand, however, should help narrow Azerbaijan and Kazakhstan is expected to stagnate as current account deficit to 6.0 percent of GDP. capacity expansion is delayed until 2015-16. Non-oil sector growth is also set to decelerate in both countries Growth in the developing Commonwealth of independent States sub because of tighter fiscal policy (Azerbaijan) and slower -region is projected to slow in the near-term. Growth for 2014 is credit growth (Kazakhstan). In Uzbekistan, buoyant forecast at 2.2 percent, down from an estimated 4.0 natural gas exports will continue to drive strong growth, percent in 2013, before rising again to an average 4.6 and but with its two other key export commodities (cotton 4.9 percent in 2015-16. The slowdown in the near-term is and gold) well below 2010-13 levels and its major export led by weaker growth of the two largest economies in the markets (including Russia, Turkey, Ukraine, and China) sub-region, Kazakhstan and Ukraine and spillovers from set to decelerate, projected growth is lower than what it a slowdown in Russia (see Box 2.1). has seen in the past decade (averaging 8 percent). Growth in resource-rich countries in the sub-region Among the non-energy exporting Commonwealth of Independent (Azerbaijan, Kazakhstan, Uzbekistan) will continue to be States, growth is expected to remain sluggish with significant above the regional average, supported by still relatively downside risk from a slowdown in Russia and a deeper recession in high oil and gas prices, robust government investments, Ukraine. Belarus is particularly exposed, as it trades and generous social transfers. While oil prices are heavily with both Ukraine (8.8 percent of its total trade) expected to remain high at $103 a barrel on average in and Russia (47.5 percent). Armenia, Tajikistan, Kyrgyz 47 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Europe and Central Asia Republic, and Moldova are vulnerable to dislocations in the further withdrawal of extraordinary monetary the Russian labor market because remittances from measures in the US could be less orderly than is Russia account for a large part of GDP (see also Box currently anticipated. 2.1). While the currently available forecast does not project material weakening in remittances—remittances Despite broadly encouraging recent data, downside risks to a to the Commonwealth of Independent States are sustained recovery in the developing Central and Eastern Europe projected to increase by 8.3 percent in 2014—there are sub-region remain substantial. Especially in Southern Europe substantial downside risks. (Albania, Bulgaria, Bosnia and Herzegovina, Macedonia FYR, Montenegro, Serbia), there are clear downside risks to domestic demand growth, relating in the near term to Risks devastating floods (notably in Serbia and Bosnia and Herzegovina), and in the medium term to still high unemployment, high private sector debt, and the slow recovery in bank lending amid high and in some cases Heightened tensions between the EU and Russia are a key rising NPLs. Even though the high levels of NPLs have downside risk to the regional forecasts. Tensions between not caused serious instability of the financial sector so Russia and Ukraine have so far resulted in limited far, as these loans appear to be well-provisioned and sanctions by the US and the EU, such as interruption of backed by adequate bank capital, not tackling this risk trade negotiations, non-participation in G8, freezing of head-on may further destabilize the fragile banking sector assets and visa bans on a limited number of former and threaten credit recovery and growth prospects. At Ukrainian and Russian officials. Commodity markets and the same time, lack of progress in fiscal consolidation financial markets (outside these two countries) have thus and insufficient effort in tackling remaining structural far shown little response. However, should tensions problems (e.g., large public sector wage bill, expensive further escalate, more intrusive sanctions, possibly and poorly-targeted social transfers, restructuring of the interrupting trade and banking flows, cannot be ruled state-owned enterprises) leave little fiscal room for bold out. Given the close economic interdependence between policy action to counter lingering deflation threats and to the EU and Russia (see Box 2.1), the escalation of increase growth-promoting investments. sanctions would likely impose large economic costs, damaging recoveries in both. For instance, in Russia, oil Downside risks to commodity prices and potential weakening of revenues represent 9 percent of GDP and 25 percent of remittance inflows from Russia represent a major source of government revenues, and a loss of EU export markets uncertainty for countries among developing Commonwealth of could reduce government revenues by 10 or more Independent States. Most countries in the sub-region are percent of GDP. In Central and Southeastern Europe heavily exposed to one or a few commodity exports— (e.g., Germany, Italy, Hungary, and Poland), especially, including Azerbaijan, Armenia, Kazakhstan, Tajikistan, Russia accounts for up to 80 percent of gas imports. If and Uzbekistan (figure 2.10)—which increase their the current consumption of Russian natural gas was to be susceptibility to volatile commodity prices. In addition, replaced by global imports (assuming a ready supply Russia is the most important export market for majority could be found without raising global prices), the EU’s of the sub-region as well as the most important source of costs of natural gas import could rise temporarily by 50 inward remittances and FDIs. What’s more, the percent (or about 0.15 percent of GDP). More Commonwealth of Independent States are heavily dependent countries would see higher increases in gas integrated with each other—other Commonwealth of cost. For example, costs in Hungary and Poland could Independent States are their major trading partners as rise by 1.4 and 0.4 percent of GDP, respectively. Such well as sources of labor remittances (figure B2.1.2)— large costs on both the EU and Russia could significantly implying that there is a significant potential for a negative derail the economic recoveries in both, with ramifications feedback loop whereby a downturn in the region for the entire region. becomes self-reinforcing. Disorderly adjustments to higher global interest rates —due to anticipated or actual monetary policy tightening or increases in risk aversion—continue to be a risk. The initial reaction to the start of tapering in early January was calm, but subsequent bouts of market volatility reflect greater investor sensitivity to global monetary and risk conditions. There remains a risk that market reaction to 48 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Box 2.1 Ukraine crisis and impact on the ECA region Recent developments The tensions with Russia have heightened at a time when Figure B2.1.1 Several countries are heavily exposed to Ukraine’s economy was already showing strains from mounting Russia and Ukraine via trade links external and internal imbalances. Growth was anemic in 2013, with % of total exports in 2013 % of total imports in 2013 Exports to Ukraine consolidated fiscal deficit and current account deficit reaching 7 60 Exports to Russia 60 and 9 percent of GDP, respectively, and short -term external debt Imports from Ukraine (RHS) 50 50 exceeding $35bn (more than 30 percent of total external debt). Imports from Russia (RHS) Sharp depreciation of hryvnia in early month of 2014 created fur- 40 40 ther pressure on foreign reserves, sovereign default risks, and liquidity crisis in the already struggling banking sector (with non- 30 30 performing loans exceeding 38 percent in 2013). An emergency 20 20 financing from the international community, including $17.1bn (of which $3.2bn available immediately) from the IMF and $1.5bn from 10 10 the World Bank, will help Ukraine avert economic and financial collapse but its success will be contingent on the new government 0 0 Romania Belarus Moldova Latvia Estonia Slovenia Hungary Armenia Lithuania Uzbekistan Kyrgyz Republic Georgia Serbia Poland Tajikistan Turkey Azerbaijan Kazakhstan undertaking significant stabilization and structural reforms, includ- ing adjustment of energy prices and social outlays. Outlook Ukraine’s GDP is expected to shrink by 5.0 percent in 2014, taking into Source: IMF Direction of Trade. account several key developments that have worsened the outlook since January, including the loss of access to its biggest export market Figure B2.1.2 Russia and Ukraine are important sources (Russia), sharp rises in the price of imported gas, and declines in com- of remittances in the Commonwealth of modity prices for steel and wheat—two of the country’s key exports. Independent States Currency depreciation, shocks to Russian gas imports, and removal of domestic fuel subsidies will accelerate inflation, eroding household % of total remittance in 2012 Others Other CIS Ukraine Russia incomes and depressing consumption. The weak banking sector will 100 also constrain credit growth and investment even if an outright banking 90 crisis was avoided. While the country’s exports could theoretically 80 benefit from a weaker hryvnia, given the disruption of present trade 70 linkages—as much as a third of Ukraine’s total exports had gone to 60 Russia and the members of the Eurasian Customs Union countries in 2013 (mainly consisting of heavy machinery, iron and steel, and nucle- 50 ar reactors)—redirection of the country’s exports to the West may not 40 be easy over the short term. We therefore forecast only a slow and 30 gradual recovery in 2015-16 (2.5 and 4.0 percent, respectively). 20 10 Impact on Europe and Central Asia As the fifth largest country in developing Europe with close trade 0 Armenia Azerbaijan Belarus Kyrgyz Moldova Tajikistan Ukraine and financial links with the rest of the region, a deeper recession in Rep. Ukraine will have a negative impact on neighboring countries via Source: World Bank Bilateral Remittance Matrix 2012. trade and financial links. However, the impact on the region will depend on Russia as it is the largest export market and the major Figure B2.1.3 Dependency on imported gas from Russia source of remittances for many countries especially in Central varies across countries in the region Asia, as well as the major supplier of oil and gas to both develop- ing and developed Europe. % Consumption in 2013 (bcm) bcm 120 80 Import from Russia in 2013 (bcm) a. Trade link—Several countries are heavily exposed to both Russia 100 Dependency (%) 70 and Ukraine via trade links (figure B2.1.1). Belarus, Georgia, Moldo- 60 va have the tightest trade links with Ukraine (both export and im- 80 50 port). Belarus is the most exposed, as it trades heavily with both 60 40 Ukraine (7.8 percent of its total trade) and Russia (49.5 percent). 30 Georgia has close trade links with Ukraine (7.5 percent of total trade) 40 but relatively small exposures to Russia (5.1 percent), having in- 20 20 creased its trade with Europe. Moldova, Armenia, and Kazakhstan 10 rely on Ukraine mostly for their imports but all of them are heavily 0 0 Czech Republic Poland Finland Belarus Slovakia Turkey Hungary Belgium Germany Italy Ukraine France Greece Austria Netherlands exposed to Russia for their exports (20, 19, and 12 percent of total exports, respectively). Baltic countries also have significant Russian exposures of between 10-20 percent of total exports. In contrast, developing Central and Eastern European economies only send between 0-8 percent of total exports to both Russia and Ukraine. Source: BP Statistical Review of World Energy and BMI. 49 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBALNot EMBARGOED: for newswire ECONOMIC transmission, PROSPECTS | June 2014 posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, and Europe 12:00am GMT) Central Asia b. Financial link—Compared to US banks, EU banks are relatively heavily exposed to Russia, and in particular Russian corporates, and to a lesser extent to Ukraine. Total EU bank exposure to Ukraine is estimated to be around US$ 23bn (around 0.1 percent of the t otal expo- sure of reporting banks on ultimate risk basis). Austrian and Italian banks are the most exposed to Ukraine. EU bank exposure to Russia is $165bn (about 1.0 percent), with France, Italy, and German banks among the most exposed. The US bank exposure to Russia is estimated to be $32bn (about 1.1 percent). Data for Russian banks’ exposure to Ukraine is not readily available but four Russian banks (Gazprombank, Sberbanks, the majority -state-owned VTB, and the state development bank VEB) are reported to hold between them an estimated $28bn of assets in Ukraine. c. Remittance link—Based on the World Bank’s estimates of bilateral remittance matrix in 2012, remittances from Ukraine represent sizea- ble share of total in Moldova (18 percent) and Belarus (15 percent), while those from Russia represent major shares among most develop- ing Commonwealth of Independent States, (40-79 percent) and particularly high in Kyrgyz Republic (79 percent) (figure B2.1.2). Given the high share of remittances to GDP in general, Tajikistan (52 percent), Kyrgyz Republic (31 percent), Moldova (25 percent) are among the most vulnerable to transmission of shocks through this link. While the resilience of remittance flows from Russia so far despite its growth deceleration is reassuring, deeper recession in Russia (and Ukraine) could slow and reverse the significant rising trends in remittance in- flows which, given their importance, would have a major impact on these countries’ current account balance, household consumption, and poverty dynamics. d. Energy link—Russia supplies 30 percent of the natural gas consumed in Europe. Dependency on imported gas from Russia varies across the member states (figure B2.1.3) from a low of 20 percent in Italy to a high of over 100 percent in Latvia, although the dependency ratio tends to be higher among smaller consumers of natural gas. In 2012, Poland depended on Russia for nearly 50 percent of its natural gas consumption, and Lithuania, over 90 percent. Since Russia’s economy relies heavily on revenue from gas exports to Europe (9 percent of GDP, a quarter of government revenues, and nearly two-thirds of export revenues), the mutual dependency in energy markets, we be- lieve, will likely contain the chance of sharp escalation of tensions between the EU and Russia although it cannot be ruled out. 50 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table 2.6 Europe and Central Asia country forecasts 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Albania GDP at market prices (% annual growth)b 4.9 3.8 3.1 1.3 0.4 2.1 3.3 3.5 Current account bal/GDP (%) -8.5 -10.1 -13.3 -10.3 -10.6 -10.3 -12.4 -14.8 Armenia GDP at market prices (% annual growth)b 7.7 2.2 4.7 7.2 3.5 5.0 5.0 5.0 Current account bal/GDP (%) -8.8 -14.2 -11.4 -12.0 -10.5 -8.7 -7.7 -7.0 Azerbaijan GDP at market prices (% annual growth)b 14.4 4.9 0.1 2.2 5.8 5.2 4.1 3.6 Current account bal/GDP (%) 3.2 28.4 26.0 22.5 16.5 12.6 8.1 5.6 Belarus GDP at market prices (% annual growth)b 6.6 7.7 5.5 1.7 0.9 -0.5 1.5 1.0 Current account bal/GDP (%) -4.3 -15.0 -7.9 -2.9 -10.2 -8.4 -9.8 -7.6 Bosnia and Herzegovina GDP at market prices (% annual growth)b 4.0 0.7 1.3 -1.1 1.8 2.0 3.5 3.5 Current account bal/GDP (%) -13.3 -5.6 -8.8 -9.6 -7.5 -6.6 -6.3 -6.1 Bulgaria GDP at market prices (% annual growth)b 4.0 0.4 1.8 0.6 0.9 1.7 2.4 2.8 Current account bal/GDP (%) -11.3 -1.5 0.1 -0.8 1.9 -0.5 -1.4 -1.6 Georgia GDP at market prices (% annual growth)b 5.6 6.3 7.2 6.2 3.2 5.0 5.5 6.0 Current account bal/GDP (%) -11.2 -10.3 -12.5 -11.9 -5.9 -8.1 -7.8 -7.6 Hungary GDP at market prices (% annual growth)b 1.8 1.3 1.6 -1.7 1.1 2.4 2.5 2.5 Current account bal/GDP (%) -6.8 0.2 0.4 0.4 2.8 2.5 2.0 1.8 Kazakhstan GDP at market prices (% annual growth)b 7.5 7.3 7.5 5.0 6.0 5.1 5.9 6.0 Current account bal/GDP (%) -2.0 1.0 5.4 -0.4 -0.1 1.0 1.5 1.6 Kosovo GDP at market prices (% annual growth)b 5.8 3.9 4.5 2.7 3.0 3.5 3.5 4.0 Current account bal/GDP (%) -7.3 -12.0 -13.8 -7.6 -6.5 -7.4 -7.2 -7.3 Kyrgyz Republic GDP at market prices (% annual growth)b 4.2 -0.5 6.0 -0.1 10.5 6.5 5.4 5.3 Current account bal/GDP (%) -5.1 -6.4 -6.0 -15.0 -13.5 -15.7 -14.5 -12.6 Moldova GDP at market prices (% annual growth)b 4.9 7.1 6.8 -0.7 8.9 3.0 3.8 4.5 Current account bal/GDP (%) -8.3 -7.7 -11.3 -6.8 -4.8 -6.7 -6.9 -7.1 Macedonia, FYR GDP at market prices (% annual growth)b 2.3 2.9 2.8 -0.4 3.1 3.0 3.5 3.7 Current account bal/GDP (%) -6.0 -2.1 -2.5 -3.1 -1.9 -3.3 -4.1 -5.0 Montenegro GDP at market prices (2005 US$)b .. 2.5 3.2 -2.5 3.5 3.2 3.5 3.3 Current account bal/GDP (%) -11.4 -22.9 -17.7 -18.7 -14.6 -16.9 -19.0 -20.0 Romania GDP at market prices (% annual growth)b 4.4 -0.9 2.3 0.4 3.5 2.8 3.2 2.9 Current account bal/GDP (%) -8.0 -4.4 -4.6 -4.4 -1.1 -2.0 -1.8 -2.1 Serbia GDP at market prices (% annual growth)b 3.6 1.0 1.6 -1.5 2.5 1.0 1.5 2.5 Current account bal/GDP (%) -9.7 -6.7 -9.1 -10.7 -5.0 -4.8 -4.6 -5.3 51 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Tajikistan GDP at market prices (% annual growth)b - - - 7.5 7.4 6.3 6.2 5.8 Current account bal/GDP (%) -4.8 -1.2 -4.7 -1.3 -2.7 -2.5 -2.0 -2.0 Turkey GDP at market prices (% annual growth)b 3.0 9.2 8.8 2.1 4.0 2.4 3.5 3.9 Current account bal/GDP (%) -3.2 -6.2 -9.7 -6.1 -7.9 -6.0 -6.2 -6.8 Turkmenistan GDP at market prices (% annual growth)b 12.6 9.2 14.7 11.1 10.1 10.0 10.0 10.1 Current account bal/GDP (%) 7.4 -10.6 2.0 0.0 -3.4 -1.7 -1.5 -1.5 Ukraine GDP at market prices (% annual growth)b 3.9 4.1 5.2 0.3 0.0 -5.0 2.5 4.0 Current account bal/GDP (%) 2.0 -2.6 -6.3 -8.1 -9.2 -4.6 -4.3 -3.9 Uzbekistan GDP at market prices (% annual growth)b 6.1 8.5 8.3 8.2 8.0 7.0 6.7 6.7 Current account bal/GDP (%) 5.2 6.2 6.2 5.8 1.2 2.1 1.8 0.7 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f c Recently transitioned to high income countries Croatia GDP at market prices (% annual growth)b 2.7 -2.3 -0.2 -1.9 -1.0 -0.5 1.2 1.8 Current account bal/GDP (%) -5.6 -1.1 -0.9 -0.1 1.3 2.0 2.0 1.8 Czech Republic GDP at market prices (% annual growth)b 3.1 2.5 1.8 -1.0 -0.9 2.0 2.4 2.9 Current account bal/GDP (%) -3.6 -3.8 -2.8 -2.4 -2.4 -1.5 -0.9 -1.8 Estonia GDP at market prices (% annual growth)b 3.2 2.6 9.6 3.9 0.8 2.0 3.0 4.0 Current account bal/GDP (%) -9.1 2.8 1.8 -1.8 -1.0 -1.9 -2.1 -1.8 Latvia GDP at market prices (% annual growth)b 3.7 -0.3 5.3 5.0 4.1 3.8 4.0 4.6 Current account bal/GDP (%) -10.1 3.0 -2.2 -2.5 -0.8 -1.9 -2.4 -2.4 Lithuania GDP at market prices (% annual growth)b 4.2 1.3 6.0 3.7 3.3 3.3 4.0 4.2 Current account bal/GDP (%) -7.2 0.0 -1.4 -0.2 0.1 -0.4 -0.8 -1.2 Poland GDP at market prices (% annual growth)b 3.5 4.1 4.5 1.8 1.6 3.3 3.5 3.8 Current account bal/GDP (%) -4.3 -5.1 -5.0 -3.7 -1.6 -2.5 -2.8 -3.2 Russian Federation GDP at market prices (% annual growth)b 4.4 4.5 4.3 3.4 1.3 0.5 1.5 2.2 Current account bal/GDP (%) 9.2 4.4 5.1 3.6 1.6 2.8 2.0 1.2 Slovak Republic GDP at market prices (% annual growth)b 4.3 4.2 3.0 1.8 0.9 2.2 3.1 3.4 Current account bal/GDP (%) -4.6 -3.7 -2.1 2.2 2.0 1.9 2.3 2.2 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. Bosnia and Herzegovina, Turkmenistan are not forecast owing to data limitations. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. GDP measured in constant 2010 U.S. dollars. c. The recently high-income countries are based on World Bank's reclassification from 2004 to 2014. 52 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Activity in the Latin America and the Caribbean region has been weak reflecting stable or declining commodity prices, the drop in first quarter U.S. GDP growth and domestic challenges. Firming regional exports on the continued recovery among advanced countries and strong capital inflows should lift regional GDP growth from 1.9 percent in 2014, to 2.9 percent in 2015 and 3.5 percent in 2016. The region faces a major risk of slower longer term growth unless productivity enhancing reforms are stepped up. Recent developments many countries, fiscal and monetary policies remained accommodative in an effort to support growth. Nevertheless, regional growth slowed to 1.4 percent (q/q saar) in Q4 2013, and further to 0.9 percent in Growth remained broadly flat on average in 2013, with Q1 2014, reflecting weak Q1 readings in Brazil, considerable cross-country divergence as soft export growth was Mexico and Peru amid a tax hike in Mexico, a more offset to varying degrees by domestic demand growth. On challenging export environment and increasingly average across the region, GDP growth edged down binding supply side constraints, as the region overall by 0.1 percentage point to 2.4 percent (y/y) in 2013, was close to full employment in 2013. with diverging trends among the sub regions. Developing North and Central America experienced a Export growth continues to be weak in early 2014 in much of sharp slowdown led by Mexico amid slower global the region. Weather related weakness in the U.S., a demand and a downturn in the construction sector. policy-induced slowdown in China, and weak growth On the other hand, led by Argentina, Brazil and in Argentina have continued to weigh on Paraguay, growth in South America strengthened on merchandise exports in a number of countries in the bumper harvests and a rebound in investment. The region. In Argentina, in particular, exports fell more Caribbean economies also saw growth accelerate than 50 percent (3m/3m saar) in the three months to modestly on the back of the U.S. recovery in the March, partly reflecting a slowdown in China second half of 2013. Regional export growth in 2013 combined with a still overvalued real exchange rate. was weak, dampened by easing growth in China, First quarter exports were also weak in Brazil, falling commodity prices (Brazil, Colombia, Costa reflecting declining competitiveness as a result of Rica, Jamaica, Mexico, Peru), and a growth slowdown rising costs and wages, and infrastructure in tourist arrivals (Caribbean and Central America). bottlenecks. In contrast and as an exception in the Monetary tightening in Brazil to contain inflationary region, Bolivian exports surged as a result of strong pressures continued through the second half of 2013, gas exports that have benefitted from stable prices and contributed to the ongoing slowdown and and production increases amid firm demand from dampened growth in regional trading partners. In Argentina and Brazil. 53 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean Despite weak Q1 GDP outturns, industrial activity in early 2014 Figure 2.11 Regional industrial production has picked up suggest a pickup in growth. Industrial production across the in recent months region has picked up modestly since end-2013 (figure 2.11). In a lagged response to the U.S. recovery in the second half of 2013, growth in industrial production in Mexico re-gained momentum following weakness in late 2013. Likewise, higher domestic demand growth raised industrial production in Colombia, which saw production grow in 40 of its 44 sectors. Fiscal policy loosened in much of the region in 2013. With the majority of the countries in the region loosening in 2013, the fiscal deficit at the regional level widened from 3.6 percent in 2012 to around 4 percent of GDP in 2013. For example, Brazil’s fiscal deficit increased 0.5 percentage points to 3.3 percent of GDP in 2013 as the Source: Datastream, Haver Analytics. government implemented counter-cyclical measures such as tax breaks and an expansion of public lending to stem the growth slowdown (figure 2.12). Similarly, Figure 2.12 Many countries loosened fiscal policy in 2013 Ecuador saw its fiscal deficit widen by 3.1 percentage Change in fiscal deficit points to more than 4 percent of GDP on healthcare 2012-2013, percentage points and education reforms. In contrast, a cyclical upturn 4.5 4.1 and/or consolidation measures reduced deficits and 3.5 3.2 2.5 2.6 2.4 improved fiscal sustainability in Argentina, Venezuela 1.5 1.5 and several Caribbean countries (Dominica, Dominican 0.6 0.6 0.3 0.5 Republic, Jamaica, St. Lucia). In particular, Jamaica saw -0.5 -0.2 -0.2 -0.4 -0.5 -0.5 the largest fiscal improvement in the region going from -1.5 -1.0 -1.1 -2.5 -1.4 -1.5 -1.7 -1.7 -1.9 -2.0 a deficit of more than 4 percent in 2012 to a surplus of -2.2 -3.5 -3.1 -3.2 0.1 percent of GDP in 2013. Spending restraint, higher -4.5 -4.2 tax revenue, and lower interest and amortization payments on restructured domestic debt, together with assistance from multilaterals supported this remarkable fiscal improvement. Source: IMF 2014 WEO database. Monetary policy continues to be generally accommodative, with some notable exceptions. Regional central bank policy rates in most countries remained below 2 percent in real terms Figure 2.13 Central bank policy rates have remained low and below potential growth. In 2014, policy rates were cut further in both Peru and Guatemala to support economic growth (figure 2.13). In contrast, citing concerns about supply bottlenecks and inflation as a result of a drought, rapid minimum wage growth and pass-through of recent currency depreciation, the central bank of Brazil has been tightening, since April 2013 increasing the key Selic interest rate 375 basis points to 11.0 percent. Similarly to contain inflation in an improving economy, the central bank of Colombia increased the benchmark interest rate by 25 basis points to 3.5 percent in April 2014. Currency depreciations in the wake of May 2013 tapering announcement have generally persisted. The first Source: Datastream, Haver Analytics. announcement of tapering intentions of asset purchases by the Federal Reserve Bank in May 2013 triggered 54 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean substantial depreciations across the region on a reassessment of growth prospects. These have generally Figure 2.14 Regional currencies remain depreciated below mid 2013 levels despite recent appreciation persisted. To date, the Brazilian real, Colombian peso, Jamaican dollar, Mexican peso, and Peruvian Nuevo sol on average remained around 6 percent more depreciated than their levels in April 2013, with largest cumulative depreciations in Jamaica and Brazil as investors were concerned about rising external imbalances (figure 2.14). Giving way to mounting currency pressures as international reserves dwindled, Argentina devalued its currency in late January by 18 percent. In contrast, the announcement of budget cuts in February in conjunction with continued monetary tightening, along with political speculation, has generated some appreciation in Brazil. Currency depreciation and accommodative fiscal and monetary Source: Datastream, Haver Analytics. policies have added to inflation pressures in some countries in the region. With the median at around 3.5 percent (y/y) in March, consumer price inflation in the region is Figure 2.15 Inflation pressures are rising in a number of countries generally low. However, inflation pressures have increased in several countries due to recent currency depreciations, accommodative fiscal and monetary policies and country-specific domestic factors (figure 2.15). For example, the weakened Jamaican dollar temporarily raised inflation to reach nearly 10 percent (y/y) in 2013, but pressures have since eased with inflation at around 4.5 percent (3m/3m saar) in the three months to April 2014. In Venezuela, inflation rates were near 50 percent in the three months to March, reflecting a rapidly growing money supply and acute shortages of essential foodstuffs and industry inputs. In contrast, fiscal and monetary tightening and softer imported commodity prices, helped contain inflation pressures in Colombia where inflation Source: Datastream, Haver Analytics. declined below 2 percent in late 2013. Capital flows to the region have been volatile but on average Figure 2.16 Gross capital flows have rebounded in re- cent months after sliding in February robust, especially into domestic bond markets. Despite volatility following May 2013 tapering concerns, gross capital flows to the region increased 18.8 percent (y/ y) for 2013 as a whole (figure 2.16). Moreover, year-to -date flows have increased 15.8 percent over the same period in 2013. Although equity issuance and bank flows slowed in the second half of 2013 and early 2014, corporate bond issuance expanded sharply, especially in Brazil and Mexico. In Q1 2014 alone, corporate bond issuance in the region amounted to US$ 43.4 billion. Just under half (46 percent) was issued by the oil and gas industry (compared to 14 percent in 2010). While energy prices are broadly stable in 2014, they are projected to decline 2.8 percent in 2015, which may present headwinds to Source: World Bank. continued issuance by these corporates. 55 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean Table 2.7 Latin America and the Caribbean forecast summary (annual percent change unless indicated otherwise) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b GDP at market prices 2.9 5.9 4.1 2.6 2.4 1.9 2.9 3.5 c (Sub-region totals-- countries with full NIA + BOP data) GDP at market pricesc 2.9 6.0 4.1 2.6 2.5 1.9 2.9 3.5 GDP per capita 1.7 4.7 3.0 1.5 1.3 0.8 1.9 2.4 PPP GDP 2.7 6.0 4.3 2.8 2.6 2.0 3.1 3.6 Private consumption 3.3 5.7 5.2 3.9 3.0 1.6 2.4 2.8 Public consumption 2.9 4.2 3.0 4.0 2.7 2.6 2.3 2.6 Fixed investment 3.8 11.7 8.2 2.1 2.7 1.2 4.1 5.0 Exports, GNFSd 2.0 9.5 7.1 3.1 1.1 1.9 4.4 5.5 Imports, GNFSd 3.8 21.8 11.1 4.8 2.6 1.4 3.1 4.1 Net exports, contribution to growth -0.2 -1.9 -0.8 -0.4 -0.3 0.1 0.2 0.2 Current account bal/GDP (%) -0.4 -1.4 -1.4 -1.7 -2.5 -2.7 -2.7 -2.5 GDP deflator (median, LCU) 6.6 5.0 6.8 4.4 2.4 3.8 3.6 3.7 Fiscal balance/GDP (%) -2.5 -3.4 -3.0 -3.6 -4.1 -4.4 -4.3 -4.2 Memo items: GDP Broader geographic region 2.9 5.9 4.2 2.8 2.5 1.9 3.0 3.5 (incl. recently high income countries)e f South America 3.4 6.3 4.1 2.1 2.8 1.6 2.7 3.3 g Developing Central and North America 1.5 5.0 4.1 4.1 1.5 2.6 3.6 4.0 h Caribbean 3.2 4.4 3.9 3.0 3.3 3.4 3.6 3.9 Brazil 2.9 7.5 2.7 0.9 2.3 1.5 2.7 3.1 Mexico 1.3 5.1 4.0 4.0 1.1 2.3 3.5 4.0 Argentina i 2.9 9.1 8.6 0.9 3.0 0.0 1.5 2.8 Source: World Bank. a. Growth rates over intervals are compound weighted averages; average growth contributions, ratios and deflators are calculated as simple averages of the annual weighted averages for the region. b. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. c. Sub-region aggregate excludes Cuba, Grenada, and Suriname, for which data limitations prevent the forecasting of GDP components or Balance of Payments details. d. Exports and imports of goods and non-factor services (GNFS). e. Recently high-income countries include Chile, Trinidad and Tobago, and Uruguay. f.South America: Argentina, Bolivia, Brazil, Colombia, Ecuador, Guyana, Paraguay, Peru, Venezuela g. Developing Central & North America: Costa Rica, Guatemala, Honduras, Mexico, Nicaragua, Panama, El Salvador. h. Caribbean: Belize, Dominica, Dominican Republic, Haiti, Jamaica, St. Lucia, St. Vincent and the Grenadines. i. Preliminary for long-term average. Data was recently rebased; missing data up to 2003 was spliced with the earlier data. Declining commodity prices have weighed on current account and fiscal balances. Key commodity price indices, with the Outlook exception of energy, declined significantly in 2013, and are expected to ease further in 2014. The prices of agriculture products, metals and precious metals (in U.S. With positive output gaps largely closed in 2013, regional growth dollars) declined by 7.2, 5.5 and 16.9 percent, will grow broadly in line with potential GDP over the medium respectively, in 2013, and are expected to decline another term. Regional growth is expected to strengthen steadily 1.0, 5.1 and 11.4 percent in 2014. The resulting declines from 1.9 percent in 2014, to 2.9 percent in 2015 and 3.5 in export and tax revenues weakened current account percent in 2016 (table 2.7). While the recovery that is among commodity exporters in 2013 (Belize, Bolivia, underway in advanced countries will increasingly support Brazil, Colombia, Ecuador, Guyana, Peru). At the external demand growth in the region, tightening regional level, the current account deficit from 1.7 financing conditions (at least in 2014) and lower percent to 2.5 percent in 2013.. commodity prices will dampen domestic demand growth 56 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean Table 2.8 Net capital flows to Latin America and the Caribbean ($billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Capital Inflows 153.5 166.7 342.0 299.4 294.6 323.6 334.5 355.5 371.5 Foreign direct investment 121.9 71.7 111.7 145.6 152.1 174.3 166.5 175.2 187.6 Portfolio investment -5.1 67.0 129.0 71.4 118.0 105.2 106.8 110.8 110.5 Equity -11.6 41.2 39.3 2.9 19.6 15.7 19.3 25.4 32.1 Debt instruments 6.5 25.8 89.8 68.5 98.4 89.5 87.5 85.4 78.4 Other investment* 36.7 28.0 101.3 82.5 24.5 44.1 61.2 69.5 73.4 o/w Bank lending 35.1 -4.7 19.2 45.6 37.7 35.2 34.8 37.3 42.1 Short-term debt flows 2.6 -7.9 45.9 -5.9 12.3 15.4 22.7 18.1 20.5 Official inflows 6.4 17.2 22.6 4.9 11.8 5.1 6.0 7.0 7.0 World Bank 2.5 6.2 8.3 -2.9 3.6 3.1 .. .. .. IMF 0 0.4 1.3 0.2 -0.1 -4 .. .. .. Other official 3.9 10.6 13 7.6 8.4 6 .. .. .. Memo items (as a percentage of GDP) Current account balance -0.9 -0.8 -1.4 -1.4 -1.7 -2.5 -2.7 -2.7 -2.5 Capital inflows 3.7 4.3 7.1 5.5 5.4 5.9 5.8 5.8 5.5 Capital outflows 2.0 2.2 3.5 2.2 2.2 2.6 .. .. .. Source: World Bank. * including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. Note: e = estimate, f = forecast. and keep growth around potential. With largely closed slowdown to 3.6 percent in 2014 after surging 9.9 percent output gaps and limited excess capacity, there is little in 2013 (table 2.8). The unusually large increase in 2013 scope for sharp and sustained accelerations in growth was due to a 14.6 percent surge in FDI, mainly due to the without generating macroeconomic imbalances. Belgian company Anheuser-Busch InBev’s purchase of the Mexican brewery, Modelo, that contributed an The recovery taking hold in advanced economies will strengthen additional $13 billion flowing into Mexico. From 2015 export demand. While there are substantial compositional onwards, however, sustained increases in foreign direct differences between the export baskets to China and to investment will lead net capital flows to the region to advanced countries, declines in Chinese demand for the grow by 6.3 percent in 2015 and a further 4.5 percent in region’s exports will be partially offset by additional 2016. These flows will fuel regional domestic demand, demand associated with recoveries in the advanced especially fixed investment, which will grow 1.2 percent countries. More specifically, increased exports to the in 2014 and a further 5.0 percent in 2016. United States and the Euro Area, along with increased tourism receipts and remittances from these advanced Central banks in a handful of countries will tighten monetary policy economies, will support regional exports growth in the to contain creeping inflationary pressures and will soften domestic medium term. In addition, depreciated local currencies in demand growth. While regional inflation rates are still much of the region may help countries gain markets generally low, depreciated regional currencies, together share as global trade growth accelerates. Overall, regional with the continued loose policy environment will add export growth is projected to accelerate from 1.1 percent some inflationary pressures in the region. Estimates of the in 2013 to more than 5 percent in 2016. However, even pass-through of exchange rate depreciations to inflation with the significant projected acceleration, export growth are detailed in Special Topic; they suggest that recent will be still substantially below that during the currency depreciations ceteris paribus are likely to commodity boom era of 2008 to 2012. temporarily increase the regional inflation rate by around 1 percentage point in 2014, but these pressures will subside Capital flows are expected to slow initially as monetary tightening thereafter. As such, the baseline forecast assumes regional in the U.S. gets underway but are expected to resume their growth central banks, in particular those with noticeably in 2015/16. Growth in net capital flows is expected to depreciated currencies, will tighten monetary policies by 57 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean modestly raising interest rates this year to keep inflation in strengthen national statistics introduce upside risks to the check, which will provide an additional drag on growth. outlook. From a more stable condition, Brazil, the region’s largest economy, with its tighter credit A continued decline especially in non-energy commodity prices conditions, weakened investor confidence and will weigh on growth. With few exceptions, non-energy microeconomic structural impediments, is expected to commodity prices are projected to continue their remain in a low but still positive growth environment in downward trend in the medium term, yielding the short-run. The baseline forecast assumes a soft negative terms-of-trade developments for the slowdown in growth for these systemic economies this majority of the region’s commodity exporters along year, and a gradual improvement in 2015 and 2016. with decreases in export and government revenue. Given the systemic nature of these economies in the Countries such as Guyana and Paraguay, where region, a sharper-than-expected slowdown in one or commodity exports make up a large share of total more of these three economies would have a ripple effect merchandise exports, will see a deterioration of on growth across the region. export revenues and current account balances. Sharper-than-expected decline in commodity prices. The baseline Performance across individual countries will vary. With the also assumes a moderate decline in commodity prices. benefits of a stronger global economy being partially Given that China accounts for 40 percent of global offset by softer domestic demand due to weak business metals demand, a sharper-than-expected or protracted confidence and tighter credit conditions, Brazil is slowdown in China is likely to lead to more severe expected to grow at 1.5 percent in 2014, but will declines in commodity prices, which could further erode accelerate to 2.7 percent and 3.1 percent for 2015 and export and government revenues of regional commodity 2016, respectively. However in the longer term, structural exporters, and potentially aggravating current account impediments to growth such as poor infrastructure, imbalances. Investment, notably into mining industries, burdensome tax and labor regulations and an would fall, providing an additional drag on overall insufficiently skilled workforce will need to be addressed economic growth. before Brazil can see a sustained level of higher growth. The Mexican economy is expected to increasingly benefit Slower longer-term growth— the new normal? More than a from the recovery in the U.S. and the increased cyclical downturn, the key concern for the region is that investment resulting from recently implemented reforms. slower long-term growth – around 3 percent per annum Growth is expected to average 3.3 percent over the 2014- – becomes the new normal. With the end of the double 2016 period. Increasing U.S. tourism is anticipated to tailwind era of a booming commodity market supported strengthen growth in the Caribbean economies from 3.4 by a surging China, and economies near or at full percent in 2014 to 3.9 percent in 2016. Similarly, driven employment and domestic credit growing at slower by steady flow of foreign direct investment, large mining rates, the region must turn to sustained productivity projects coming on stream and a broad public growth in order to boost long-term GDP growth. While transportation investment program, Colombia, Peru and the region has made great strides in enhancing Panama, respectively, are projected to lift regional growth macroeconomic stability and hence investor confidence, rates in the near and medium term. In contrast, as in investing more in infrastructure and in improving external and internal imbalances and economic security, there still remains much to be done in terms of distortions unwind, Venezuela is projected to undergo a upgrading the quality of the workforce especially in the period of low investment growth and weak GDP growth. informal sector, fostering research and development and innovation, and nurturing a more competitive environment especially in the service sector. Even if the Risks right policies are implemented today, raising productivity will take time before benefits can be realized. However, this is a necessary path if the region is to prevent mediocre growth from becoming the new Disorderly slowdown in the region’s largest economies. Venezuela normal, and maintain the remarkable social progress is currently experiencing high inflation rates along with a achieved during the last decade. According to World number of other macroeconomic imbalances and Bank estimates, the incidence of poverty in the region microeconomic distortions, and could see investment was more than halved from 2002 to 2010, whereby contract and slow sharply. Argentina has an uncertain some 70 million Latin Americans left poverty. Such economic outlook but the recent agreements on Paris progress could stall and may even reverse in a longer- Club debt, settlement with Repsol, and efforts to term low-growth environment. 58 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table 2.9 Latin America and the Caribbean country forecasts 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b Argentina GDP at market prices (% annual growth)c 2.9 9.1 8.6 0.9 3.0 0.0 1.5 2.8 Current account bal/GDP (%) 2.2 -0.2 -0.4 0.0 -0.7 -2.0 -2.2 -2.2 Belize GDP at market prices (% annual growth)c 3.7 3.9 2.3 5.3 0.7 2.5 3.7 4.1 Current account bal/GDP (%) -13.0 -3.3 -1.3 -2.0 -3.6 -3.7 -3.5 -3.2 Bolivia GDP at market prices (% annual growth)c 3.4 4.1 5.2 5.2 6.5 5.2 4.3 3.9 Current account bal/GDP (%) 3.9 4.4 2.2 7.9 3.7 2.5 2.1 2.0 Brazil GDP at market prices (% annual growth)c 2.9 7.5 2.7 0.9 2.3 1.5 2.7 3.1 Current account bal/GDP (%) -0.7 -2.2 -2.1 -2.4 -3.6 -3.9 -3.8 -3.6 Colombia GDP at market prices (% annual growth)c 3.7 4.0 6.6 4.1 4.3 4.6 4.5 4.4 Current account bal/GDP (%) -1.4 -3.1 -2.9 -3.2 -3.4 -3.6 -3.7 -3.6 Costa Rica GDP at market prices (% annual growth)c 3.8 5.0 4.4 5.1 3.5 3.7 4.3 4.6 Current account bal/GDP (%) -5.8 -3.5 -5.4 -5.3 -5.1 -5.2 -5.3 -5.3 Dominica GDP at market prices (% annual growth)c 3.1 1.0 -0.3 -1.7 0.8 1.7 2.6 2.9 Current account bal/GDP (%) -18.6 -17.3 -14.7 -11.5 -17.2 -18.4 -19.2 -18.7 Dominican Republic GDP at market prices (% annual growth)c 4.5 7.8 4.5 3.9 4.1 4.0 4.2 4.5 Current account bal/GDP (%) -3.1 -8.4 -7.9 -6.8 -4.2 -3.8 -3.4 -2.9 Ecuadord GDP at market prices (% annual growth)c 3.8 3.5 7.8 5.1 4.5 4.3 4.2 5.1 Current account bal/GDP (%) 0.9 -2.4 -0.3 -0.2 -1.3 -1.5 -2.0 -1.0 El Salvador GDP at market prices (% annual growth)c 1.7 1.4 2.2 1.9 1.7 2.1 2.6 2.8 Current account bal/GDP (%) -4.2 -2.7 -4.9 -5.3 -6.5 -5.9 -5.7 -5.5 Guatemala GDP at market prices (% annual growth)c 3.0 2.9 4.2 3.0 3.7 3.4 3.5 3.6 Current account bal/GDP (%) -4.6 -1.5 -3.4 -2.6 -2.7 -2.6 -2.8 -2.8 Guyana GDP at market prices (% annual growth)c 1.0 4.4 5.4 4.8 4.9 4.4 3.5 3.6 Current account bal/GDP (%) -10.0 -6.9 -14.5 -14.1 -17.8 -20.7 -20.2 -19.3 Honduras GDP at market prices (% annual growth)c 3.7 3.7 3.8 3.9 2.6 3.0 3.5 4.0 Current account bal/GDP (%) -6.9 -4.3 -8.0 -8.6 -8.9 -7.5 -7.3 -7.0 Haiti GDP at market prices (% annual growth)c 0.6 -5.4 5.6 2.8 4.3 3.6 3.2 3.0 Current account bal/GDP (%) 1.0 -2.5 -4.1 -3.7 -6.0 -5.8 -5.6 -5.4 Jamaica GDP at market prices (% annual growth)c 0.7 -1.5 1.7 -0.5 0.2 1.1 1.3 1.7 Current account bal/GDP (%) -10.2 -8.6 -13.3 -12.9 -10.0 -9.3 -8.0 -7.1 Mexico GDP at market prices (% annual growth)c 1.3 5.1 4.0 4.0 1.1 2.3 3.5 4.0 Current account bal/GDP (%) -1.5 -0.4 -1.1 -1.3 -2.1 -2.0 -2.2 -2.2 59 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Latin America and the Caribbean 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b Nicaragua GDP at market prices (% annual growth)c 2.5 3.3 5.7 5.0 4.6 4.5 4.4 4.4 Current account bal/GDP (%) -13.1 9.6 12.8 12.7 11.4 -9.0 -7.8 -6.8 Panama GDP at market prices (% annual growth)c 5.6 7.5 10.8 10.7 8.0 6.8 6.2 6.4 Current account bal/GDP (%) -4.8 -11.6 -15.9 -10.5 -11.2 -10.7 -10.5 -9.0 Peru b GDP at market prices (% annual growth)c 4.6 8.5 6.5 6.0 5.8 4.0 5.6 6.0 Current account bal/GDP (%) -0.7 -2.4 -1.9 -3.3 -4.5 -5.7 -5.6 -5.1 Paraguay GDP at market prices (% annual growth)c 2.2 13.1 4.3 -1.2 13.9 4.8 4.3 4.0 Current account bal/GDP (%) 1.7 -0.3 0.4 -0.9 2.1 1.8 0.9 0.1 St. Lucia GDP at market prices (% annual growth)c 2.2 0.4 1.3 0.5 -0.9 0.9 2.2 2.8 Current account bal/GDP (%) -18.7 -16.8 -19.4 -14.9 -15.6 -15.0 -13.8 -12.9 St. Vincent and the Grenadines GDP at market prices (% annual growth)c 3.2 -2.8 0.1 2.3 2.1 1.7 2.8 3.9 Current account bal/GDP (%) -18.8 -30.9 -28.9 -30.3 -30.0 -29.1 -28.5 -26.7 Venezuela, RB GDP at market prices (% annual growth)c 3.3 -1.5 4.2 5.6 1.3 0.0 1.0 1.9 Current account bal/GDP (%) 9.7 2.2 7.7 2.9 3.0 2.7 1.9 1.7 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. Cuba, Grenada, St. Kitts and Nevis, are not forecast owing to data limitations. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. Preliminary for long-term average. Data was recently rebased; missing earlier data was spliced with the previous series. c. GDP measured in constant 2010 U.S. dollars. d. Ecuador's 2016 GDP growth in 2016 is expected to accelerate, and the current account to improve, as some of the ongoing hydroelectric and energy projects begin to come on stream. 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f c Recently transitioned to high income countries Chile GDP at market prices (% annual growth)b 3.3 5.8 5.9 5.6 4.2 3.3 4.5 5.0 Current account bal/GDP (%) 0.8 1.5 -1.3 -3.5 -3.4 -3.3 -3.1 -2.9 Trinidad and Tobago GDP at market prices (% annual growth)b 5.6 0.2 -1.6 1.5 1.5 2.3 2.8 3.4 Current account bal/GDP (%) 16.0 20.2 12.3 16.0 14.5 13.8 13.0 12.7 Uruguay GDP at market prices (% annual growth)b 2.1 8.9 6.5 3.9 4.2 3.1 3.4 4.0 Current account bal/GDP (%) -1.2 -1.9 -2.9 -5.3 -5.9 -6.3 -6.1 -5.7 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. Cuba, Grenada, St. Kitts and Nevis, are not forecast owing to data limitations. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. GDP measured in constant 2010 U.S. dollars. c. The recently high-income countries are based on World Bank's country reclassification from 2004 to 2014. 60 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Activity in oil-importing countries remains weak, but is exhibiting signs of an uptick. Oil-exporting countries have seen their oil output recover too, albeit not to pre-2011 levels. Political transitions continue to unfold with a number of elections being held in 2014, delaying measures to address persistent structural challenges. Meanwhile, fiscal and external balances remain weak. Overall, growth in developing economies is expected to pick up to 1.9 percent in 2014 and strengthen to about 3.5 percent by 2016. Recent developments external accounts remain weak and are benefiting from the exceptional official support from the high-income Gulf Co-operation Council (GCC) countries. Following a stagnation in 2013, the developing countries of the In oil-importing developing countries, economic activity is stabilizing, Middle East and North Africa1 region are experiencing a recovery. but the recovery remains fragile. Strong growth in the first half Developing economies of the region experienced a 0.1 of 2013 was offset by a sharp drop in the second half such percent contraction in 2013, on the back of domestic and that growth in oil-importers rose, on average, by just 0.2 regional turmoil and weak external demand, but are off percentage points to 2.7 percent in 2013. After plunging in to a more promising start in 2014. Recovery in oil second and third quarter of 2013 in the wake of renewed production as well as manufacturing and exports is bouts of political instability, real GDP growth rebounded contributing to the pick-up in growth. This modest to 4 percent (q/q, seasonally adjusted annualized rate or upturn, however, remains fragile and well below the saar), on average, in 2013Q4, up from 1.7 percent in region’s potential as structural reforms needed to spur 2013Q3 (figure 2.17). High-frequency indicators suggest a growth, reduce unemployment and alleviate poverty continued, though fragile, recovery in the oil-importing remain unaddressed. While some countries have made countries of the region. A strong rebound in industrial strides in their political transitions, notably Tunisia, production in Egypt from a low base (figure 2.18)—driven others remain mired. Security challenges in several by growth in manufacturing, oil-extraction, and a stimulus countries are a key source of instability. Fiscal and package—had pushed up the average for these countries to 38 percent (q/q, saar) in 2014Q1. However, already in February and March industrial production growth leveled 1. This chapter covers low- and middle-income countries of the Middle off again. Sentiment in Egypt remains downbeat, with the East and North Africa region while high-income Gulf Cooperation Council (GCC) countries are excluded. The developing countries are Purchasing Managers’ Index (PMI) dipping back below 50 further divided into two groups; oil importers and oil exporters. for the first five months of 2014, after two months above Developing oil importers are: Djibouti, Arab Republic of Egypt, Jordan, the contraction/expansion threshold at the end of 2013, Lebanon, Morocco, Tunisia, and West Bank and Gaza. Developing oil exporters are: Algeria, the Islamic Republic of Iran, Iraq, signaling a slower pace of growth going forward and Libya, the Syrian Arab Republic, and the Republic of Yemen. reflecting still severe supply-side and security constraints. 61 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Middle East and North Africa Figure 2.17 GDP growth for oil-importing countries is Figure 2.18 Industrial production is volatile but exhibit- picking up in 2013Q4 ing signs of recovery Source: Haver, World Bank. Source: Haver, World Bank. While no comparable data is available for Tunisia, Jordan level of production since 1979. Iran’s output also grew in and Morocco, trade data indicates strengthening non- 2014Q1 to an average of 2.7 mb/d following the so- agricultural activity, in part buoyed by the recovery in the called “Joint Plan of Action” between the permanent five Euro Area. In Tunisia, the successful adoption of a new UN Security Council members plus Germany and Iran constitution, reduced security tensions and pre-election signed in November 2013. The Joint Plan of Action is reforms seem to have bolstered confidence. In Lebanon, designed to be temporary and the two sides have set a however, activity, exports and sentiment remain July deadline to reach a comprehensive permanent depressed, reflecting spillovers from the conflict in Syria agreement. Output in Libya has been cut to a fifth since and unsettled domestic political conditions. There are November 2013 amid persistent unrest and protest by now more than 1 million refugees living in Lebanon or separatist militias seeking a greater share of the country’s more than 20 percent of the population. The Lebanese oil wealth. Negotiations between national authorities and PMI for May pointed to a contraction in business activity regional militias have been intensifying in order to for the 11th consecutive month, with security issues resume the oil output and exports, but with limited weighing heavily on tourism arrivals and in turn success so far. impacting domestic wholesale and hospitality industries. Merchandise exports, which fell 37 percent during 2013, Ongoing political transitions and planned elections in 2014-16 contracted further by 13 percent annualized pace during may delay the implementation of needed structural reforms. A the 2014Q1. new constitution was approved in Tunisia and amendments to the 2012 constitution were approved In oil-exporting developing countries, output is recovering as well. in Egypt. While the Tunisian transition has been Growth has been highly volatile among developing oil praised for its inclusiveness, the Egyptian transition is exporters, and GDP contracted by 1.8 percent in 2013, proceeding according to the political roadmap reflecting production setbacks in Libya and Iraq, presented in the wake of the overthrow of the Morsi sanctions in Iran, and civil war in Syria. However, oil government, but at the expense of a more inclusive output now appears to be recovering, averaging 7.7 democratic process. Interim governments will govern million barrels per day (mb/d) in 2014Q1, due to in both countries until elections are held in the latter rebounding production in Iraq—the region’s largest half of 2014. A new government was also appointed producer—though still below the 2013 average output in Lebanon after nearly a year of political vacuum, and the pre-Arab Spring average (figure 2.19). In Iraq, but its duration is uncertain as the parliament is crude production surged to an average of 3.3 mb/d in supposed to elect a new president in May 2014. Q1 2014, of which 80 percent were exported as long- Regularly scheduled elections were held in Iraq and standing bottlenecks were removed in the southern oil- Algeria as well in 2014. Political transition remains at producing region as well as at the oil export terminals in an early stage in Yemen with election expected in late the Gulf. February’s output was the country’s highest 2015 or early 2016. Libya’s transition is highly volatile 62 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Middle East and North Africa Figure 2.19 Oil production in the developing oil-exporting Figure 2.20 Inflation is subsiding in developing countries countries has begun to pick up of the region Source: Bloomberg, Energy Intelligence Group, World Bank. Source: Haver, World Bank. and uncertain with elections for a new transitional Subsidies in the region remain large, growing and inefficient. parliament scheduled for June 2013. In this election Attempts are underway in Egypt, Iran, Jordan, environment, structural reforms needed to address Morocco and Tunisia to reform food and fuel slowing growth and growing unemployment and subsidies, which amount to 5 percent of GDP in poverty will likely be postponed. Tunisia, more than 9 percent in Egypt and Yemen and 11 percent in Libya. Historically subsidies have been Fiscal balances remain weak, with much of the financing motivated as a tool of social protection but there is provided by official transfers from Gulf Cooperation Council growing evidence that they are disproportionally (GCC) countries. Fiscal deficits have grown across the benefiting the well-off segments of the population, board in the wake of the Arab Spring and have now while adding to both fiscal and current account exceeded 7 percent of regional GDP for two years in pressures (among countries that import food and a row. Revenues have been falling as growth has fuel). Accordingly, reforming subsidies is crucial to slowed, while expenditures on public sector wages better serve the needy and improve macroeconomic and general subsidies — two dominant categories in fundamentals and long term fiscal sustainability in the government expenditure — have increased rapidly region (see discussion in the special topic of chapter partly to limit further social discontent. Facing fiscal 1). Weak growth and concerns about raising prices pressures and in order to sustain priority spending, pose challenges to the reform process. For example, oil-importers have cut investment spending, although Egypt will double natural gas prices in 2014 borrowed from domestic banks and benefited from for consumers connected to the gas distribution $22 billion in exceptional official financing from the network, electrical generation facilities and bakeries GCC countries. Egypt has announced two fiscal will be exempt from the hike, eliminating the bulk of stimulus packages amounting to 3.4 percent of GDP natural gas users from the reform. As a result fiscal financed by $17 billion in GCC aid in order to savings will be negligible. In Iran, the authorities have support slowing growth. In Jordan, GCC grants in increased rationed gasoline prices by 75 percent and the amount of $5 billion are financing a capital non-rationed gasoline prices by 45 percent. The hikes investment program starting in 2014. IMF programs in gasoline prices were announced in April after in Jordan, Tunisia and Morocco continue to provide inflation had fallen below 20 percent (y/y) in March buffers against possible external shocks. Oil- for the first time in 18 months (figure 2.20). Despite exporters have seen deficits emerge and widen in these reforms, more needs to be done. Energy prices almost all cases as production declined or was in region remain among the lowest in the world, and disrupted. The fiscal deterioration was most acute in far below international prices. Libya and Yemen where deficits have grown to 8 percent of GDP in 2013 as insurgencies have sharply Private capital inflows to the developing countries of the region curtailed oil output and revenues. declined in the first five months of 2014 by $2.1 billion (a 63 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Middle East and North Africa Table 2.10 Net capital flows to Middle East and North Africa ($ billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Capital Inflows 27.2 46.3 40.6 8.5 29.8 26.7 22.6 25.3 28.8 Foreign direct investment 27.6 23.3 18.6 10.8 14.6 13.4 12.3 15.3 17.8 Portfolio investment -5.2 2.3 11.0 -10.6 -1.9 -0.4 0.3 1.6 1.8 Equity 0.4 1.2 2.0 -0.6 -1.3 0.1 0.1 0.5 1.1 Debt instruments -5.6 1.1 9.0 -10.0 -0.6 -0.5 0.2 1.1 0.7 Other investment* 4.8 20.7 10.9 8.3 17.1 13.7 10.0 8.4 9.2 o/w Bank lending -1.7 -2.2 -1.8 -0.8 0.1 -0.5 -0.2 0.5 1.4 Short-term debt flows -1.9 3.0 4.5 -2.6 4.0 4.3 2.3 1.4 1.1 Official inflows -1.7 2.5 1.3 1.2 4.8 9.1 6.1 5.1 4.4 World Bank -0.3 0.9 0.8 0.9 0.8 0.8 .. .. .. IMF -0.1 -0.1 0 -0.1 0.5 0 .. .. .. Other official -1.4 1.6 0.5 0.3 3.5 8.3 .. .. .. Memo items (as a percentage of GDP) Current account balance 4.6 -0.9 1.6 2.7 -0.7 -3.4 -3.3 -3.6 -3.7 Capital inflows 2.8 4.8 3.7 0.7 2.3 2.2 1.7 1.8 1.8 Capital outflows 1.1 0.6 1.3 0.2 0.2 0.4 .. .. .. Source: World Bank. * including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. Note: e = estimate, f = forecast. decline of 38 percent) from last year, as bond flows Egypt and Tunisia, because of political turmoil. almost halved. This reflects the fact that access to Overall, net FDI levels remain well below pre-Arab international capital markets is still limited due to Spring inflows and are projected to recover to those lingering political and economic uncertainty. Only levels only late in the forecast period. three developing countries in the region raised funds in international debt markets during the first five Compounding the tight financial environment, foreign month of the year: Egypt raised $776 million through currency earnings from remittances to the developing countries a syndicated loan for trade financing purposes and of the region declined in 2013 by 2 percent to about $46 Morocco, Lebanon, and Egypt raised $2.6 billion billion. While growth in remittances is expected to combined through four new bond issues. With pick up to 5-6 percent annually over the forecast limited access to external finances, Egypt is planning period, it will remain well below the 12 percent to issue a near-record 205 billion Egyptian pounds annual average recorded during 2010-12 period. ($29 billion) in domestic debt in the second quarter Some 85 percent of remittance inflows go to the oil- and raise government tax on capital gains in an effort importing countries of the region, with Egypt being to finance its growing budget deficit. the largest recipient ($17.5 billion in 2013, compared with $19.2bn in 2012). Accordingly much of the Strong official inflows have helped compensate for weak private expansion during 2010-12 and the subsequent flows. Net capital flows to the developing countries of decline has been accounted for by Egypt. The drop the region dropped in 2013 and are estimated at $26.7 in 2013 was due in large part to more stringent billion (1.8 percent of GDP), down from $29.8 billion enforcement of labor regulations and an end to an (2.1 percent of GDP) in 2012 (table 2.10) and remain amnesty period in Saudi Arabia, which hosts a third well below the average for all developing countries of all Egyptian migrants. This resulted in a departure (5.6 percent of GDP in 2013). However, strong of some 300,000 migrants back to Egypt in the official inflows in the form of aid from the Gulf second half of 2013. Remittances to Lebanon, countries have helped the region buffer the drop-off Jordan and Morocco, other large recipients in the in private flows. The decline in private flows is a region, recovered in 2013, after flat or negative result of a drop in net FDI flows, primarily into growth in 2012. 64 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Middle East and North Africa Table 2.11 Middle East and North Africa forecast summary (annual percent change unless indicated otherwise) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b, c GDP at market prices, geographic region 4.2 4.5 2.5 2.7 1.9 2.9 3.8 3.8 c GDP at market prices, developing countries 4.1 4.7 -0.8 0.6 -0.1 1.9 3.6 3.5 (Sub-region totals-- countries with full NIA + BOP data)d GDP at market prices, developing countriesc 4.4 4.6 1.8 -1.8 0.1 2.1 2.6 3.1 GDP per capita (units in US$) 2.8 3.0 0.2 -3.3 -1.4 0.6 1.2 1.7 e PPP GDP 4.4 4.5 1.7 -1.3 0.4 2.2 2.7 3.1 Private consumption 4.1 3.5 2.1 1.2 0.8 2.2 3.3 3.5 Public consumption 4.3 1.4 3.1 3.3 2.9 3.7 3.8 3.8 Fixed investment 6.7 4.4 -1.8 -0.9 1.5 0.7 2.1 3.3 Exports, GNFSf 4.1 7.0 -4.1 -6.6 -1.1 3.7 4.2 4.5 Imports, GNFSf 7.4 4.0 1.1 3.5 2.7 3.2 4.8 5.0 Net exports, contribution to growth -0.7 0.8 -1.6 -3.0 -1.2 -0.1 -0.4 -0.5 Current account bal/GDP (%) 5.2 1.6 2.7 -0.7 -3.4 -3.3 -3.6 -3.7 GDP deflator (median, LCU) 6.0 8.4 6.4 5.8 4.8 3.7 3.9 4.0 Fiscal balance/GDP (%) -0.5 -1.9 -1.7 -7.4 -7.3 -6.6 -6.1 -6.2 Memo items: GDP Developing countries, ex. Syria 4.1 4.8 -0.6 1.7 0.8 2.2 3.8 3.6 g High Income Oil Exporters 4.4 4.3 6.3 5.0 3.9 4.1 4.0 4.1 Developing Oil Exporters 3.9 5.2 -2.6 -0.5 -1.8 1.3 3.7 3.5 Developing Oil Importers 4.5 3.8 2.6 2.5 2.7 2.7 3.4 3.6 Egypt 4.4 3.5 2.0 2.2 2.3 2.6 3.1 3.2 Fiscal Year Basis 4.3 5.1 1.8 2.2 2.1 2.4 2.9 3.2 Iran 4.6 5.9 2.7 -5.6 -1.7 1.5 2.0 2.3 Algeria 3.6 3.6 2.6 3.3 2.7 3.3 3.5 3.6 Source: World Bank. a. Growth rates over intervals are compound weighted averages; average growth contributions, ratios and deflators are calculated as simple averages of the annual weighted averages for the region. b. Geographic region includes the following high-income countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. c. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. d. Sub-region aggregate excludes Djibouti, Iraq, Libya, and West Bank and Gaza, for which data limitations prevent the forecasting of GDP components or Balance of Payments details. e. GDP measured at PPP exchange rates. f. Exports and imports of goods and non-factor services (GNFS). g. High Income Oil Exporting Countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. Outlook Other countries in the region, such as Libya, Yemen and Syria are not. Consequently, growth in the developing countries of the region is projected to pick up gradually to 1.9 percent in 2014 to around 3.5 percent in 2016, Growth in the Middle East and North Africa region is expected to helped by a rebound in oil production among oil strengthen gradually but to remain weak during the forecast period. exporters and a modest recovery among oil importing Nominal oil prices (World Bank average) underpinning economies (table 2.11). the forecasts are expected to average $103/bbl during 2014 (down slightly from $104/bbl in 2013) and decline In the baseline scenario, only a gradual improvement in the political to $99/bbl and $98/bbl in 2015 and 2016 respectively. uncertainty that has plagued the region for the past three years is Egypt, Morocco, Tunisia, Jordan, and to lesser extent expected. As a result, although growth will pick up, the Lebanon, appear to be entering the period of stable recovery is not expected to be sufficiently forceful to recovery from a period of volatility and uncertainty. make deep inroads into spare capacity and 65 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Middle East and North Africa unemployment. According to World Bank estimates, the in the 2011-2013 period. They may be approaching region needs to create 28 million jobs in the next 7 unsustainable levels as debt servicing costs account for an years—or about 4 million per year—just to keep the ever larger share of the expenditures, especially in the unemployment rate from rising. Historically, the region domestic debt markets. created 3.5 million jobs at an average growth rate of 5 percent. Of course, if political tensions ease (or Setbacks in political transitions and/or further escalation of deteriorate) more quickly than anticipated outcomes violence in Egypt, Iraq, Libya, Tunisia and Yemen would further could be substantially better (or worse). undermine confidence and delay the structural reforms or reduce oil output. On the upside, restoration of political stability and Among oil exporters, growth is expected to firm to about 3.5 policy certainty that leads to sustained attention to percent by the end of the forecast period as oil prices are structural reforms could substantially boost confidence expected to remain relatively high, and as mitigation or and return growth to the long-run potential. resolution of infrastructure problems and security setbacks improves oil output. In turn, this will underpin a External risks are more balanced. European growth could gradual improvement in fiscal outturn support domestic disappoint the already modest recovery projected, but it demand. Importantly, the baseline outlook for Iran could also do better, supporting exports, tourism, assumes a partial easing of the sanctions in line with steps remittances and capital flows in North Africa. In taken to date. addition, risks from a tightening of global financial conditions could lead to a rise in risk premiums for Among oil importers, aggregate growth is expected to remain weak developing countries and lead to lower FDI. and below potential at 2.7 percent in 2014 as performance will not improve dramatically in the forecast period unless A severe escalation of tensions in the Ukraine could pose acute there is a credible restoration of political stability and risks for the region, particularly oil and food importers. In return of confidence. In addition, without tackling the long addition to sharp impacts on global confidence which -overdue structural problems, growth cannot return to full could dent the global recovery, a disruption in grain and potential. Aggregate growth for the sub-region is expected energy supplies—Russia and Ukraine account for 16 to slowly pick up to about 3.6 percent in 2016, closer to— percent of global wheat exports, while Russia is the but still well below—potential growth. Consumption will largest global oil producer—and sharp price hikes could be underpinned by large public outlays on wages and severely weaken already stretched current and fiscal subsidies, while public investment will likely be constrained account deficits in the region. Importantly, the baseline in the forecast period by large fiscal deficits. outlook assumes no physical disruptions to the commodities markets as a result of tensions in Ukraine. Risks On the flip side, a sharper-than-projected decline in commodity prices could lead to a significant deterioration in external and fiscal accounts of the oil-exporting countries although benefiting more vulnerable importers in the region. This scenario could happen, for The region’s outlook is subject to significant downside risks that are example, if Iran and Libya return some 2 million barrels mostly internal to the region. A further escalation of violence in per day of idled capacity to the market at a time of a Syria and spillovers to other countries (mainly Lebanon, surging Iraqi and non-OPEC production (unconventional Jordan and Iraq) could adversely affect growth. Over 2.1 North American production). Economic impacts of a million Syrian refugees are hosted in the region, with sharp decline in oil prices would be significant. For refugees in Lebanon and Jordan amounting to 21 and 8 example, as presented in June 2013 edition of the GEP, percent of populations there. Economic, social, and fiscal under a scenario where oil prices decline to $80/barrel in pressures are high for these countries and could be real terms in one year, GDP growth would be reduced by exacerbated further should the civil war in Syria intensify. 1.4 percentage point (pp) in the developing oil exporters of the region. Current account balances would deteriorate by Countries in political transition have benefited from large official 3.5 pp of GDP and fiscal balances would weaken by 2.1 transfers from the Gulf economies. While these are expected to pp of GDP on average in the first year of the decline. continue, the associated debt will become increasingly While this would benefit the developing oil-importers of burdensome; also, the larger the assistance, the larger the the region, the impact would not be as economically rollover and refinancing risk for recipients. Already, significant. Their growth would improve by 0.5 pp on public debt levels have increased in oil-importing average while current and fiscal accounts would improve countries from 74 to 87 percent of the sub-regional GDP by 0.5 and 0.2 pp of GDP on average respectively. 66 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table 2.12 Middle East and North Africa country forecasts 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Algeria GDP at market prices (% annual growth)b 3.6 3.6 2.6 3.3 2.7 3.3 3.5 3.6 Current account bal/GDP (%) 22.4 7.5 9.7 6.4 1.4 0.7 -1.7 -3.4 Djibouti GDP at market prices (% annual growth)b 3.5 3.5 4.5 4.8 5.0 6.0 6.5 6.5 Current account bal/GDP (%) .. -5.4 -14.1 -12.3 -13.1 -15.2 -13.0 -12.8 Egypt, Arab Rep. GDP at market prices (% annual growth)b 4.4 3.5 2.0 2.2 2.3 2.6 3.1 3.2 Fiscal Year Basis 4.3 5.1 1.8 2.2 2.1 2.4 2.9 3.2 Current account bal/GDP (%) 1.1 -2.0 -2.6 -3.4 -1.9 -0.9 -1.5 -2.0 Iran, Islamic Rep. - GDP at market prices (% annual growth)b 4.6 5.9 2.7 -5.6 -1.7 1.5 2.0 2.3 Current account bal/GDP (%) 6.3 6.5 10.3 4.7 0.3 0.2 0.1 0.0 Iraq GDP at market prices (% annual growth)b -1.0 5.9 10.2 10.3 4.2 5.9 6.7 8.2 Current account bal/GDP (%) .. 3.0 12.0 6.7 0.0 1.0 1.2 1.4 Jordan GDP at market prices (% annual growth)b 6.1 2.3 2.6 2.7 2.8 3.1 3.5 4.0 Current account bal/GDP (%) -4.4 -7.1 -12.0 -18.4 -15.8 -13.7 -12.4 -11.3 Lebanon GDP at market prices (% annual growth)b 4.4 7.0 3.0 1.4 0.9 1.5 2.5 3.0 Current account bal/GDP (%) -16.6 -20.3 -12.1 -3.9 -6.3 -6.8 -7.0 -7.2 Libya GDP at market prices (% annual growth)b 3.8 5.0 -62.1 104.5 -9.4 -9.7 28.8 9.0 Current account bal/GDP (%) .. 22.5 9.2 29.1 -5.5 -28.0 -19.4 -18.0 Morocco GDP at market prices (% annual growth)b 4.6 3.6 5.0 2.7 4.4 3.0 4.4 4.5 Current account bal/GDP (%) -0.1 -4.3 -8.1 -9.9 -8.7 -7.9 -6.8 -5.8 Syrian Arab Republic GDP at market prices (% annual growth)b,c 4.6 3.2 -3.4 -21.8 -22.5 -8.6 -6.2 1.7 Current account bal/GDP (%) 2.8 -0.6 -16.0 -18.7 -22.0 -16.8 -12.5 -8.6 Tunisia GDP at market prices (% annual growth)b 4.2 3.0 -2.0 3.6 2.6 2.7 3.5 4.0 Current account bal/GDP (%) -2.7 -4.7 -7.3 -8.1 -8.4 -7.5 -7.1 -6.3 Yemen, Rep. GDP at market prices (% annual growth)b 3.5 7.7 -12.6 2.4 4.0 5.9 4.2 3.8 Current account bal/GDP (%) 1.1 -3.7 -4.2 -0.9 -3.0 -3.4 -3.7 -4.2 West Bank and Gaza GDP at market prices (% annual growth)b 2.4 9.2 12.2 5.9 1.5 2.5 2.7 2.9 Current account bal/GDP (%) .. -24.3 -32.0 -36.4 -29.5 -30.4 -29.6 -29.4 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f d Recently transitioned to high-income economies Oman GDP at market prices (% annual growth)b 4.3 5.6 0.3 5.8 4.8 4.5 4.0 4.0 Current account bal/GDP (%) 9.1 9.6 9.1 8.0 7.6 4.0 1.2 0.9 Saudi Arabia GDP at market prices (% annual growth)b 4.6 7.4 8.6 5.1 4.0 4.1 4.2 4.3 Current account bal/GDP (%) 15.3 11.9 23.6 22.0 17.3 15.8 13.5 10.7 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. GDP measured in constant 2010 U.S. dollars. c. The estimates for GDP decline in Syria in 2012 and 2013 are subject to significant uncertainty. d. The recently high-income countries are based on World Bank's country reclassification from 2004 to 2014. EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) South Asia’s GDP grew 4.7 percent in 2013, about 2.6 percentage points below average growth in 2003-12, mainly reflecting weak manufacturing performance and slowing investment in India. Growth is expected to pick up modestly in 2014, and then rise to about 6 percent in 2015 and 2016, with firming global demand and easing domestic constraints offsetting a tightening of international financial conditions. Key risks include weak monsoon rains and stressed banking sectors. Recent developments 3.7 percent, broadly stable from previous fiscal year, but significant in the context of fiscal adjustment required to overcome the threat of a balance of payment crisis. Pakistan’s weaker growth relative to its peers mainly South Asian regional GDP measured at market prices grew an reflects significantly lower investment rates (as a share of estimated 4.7 percent in 2013, down from 5.0 percent in 2012. GDP), in part due to energy-supply bottlenecks and Growth in both years was more than 2 percentage points security uncertainties. Growth in Bangladesh averaged lower than the average growth of the preceding decade. 6.3 percent during 2010-2013, but slowed to an estimated South Asia’s sub-par growth performance in recent years 5.4 percent during the fiscal year ending in June 2014, can be mainly attributed to subdued growth in India, the adversely affected by social unrest and disruptions prior largest regional economy, where growth fell-off sharply to national elections in January, and by capacity after a stimulus-induced cyclical rebound following the constraints that have resulted in persistent inflationary 2008-09 global financial crisis. Since 2012, investment pressures. Domestic demand in Bangladesh has been growth has slowed sharply in India (figure 2.21) amidst supported partly by robust agricultural harvests and high inflation and weakened business confidence. The migrant remittances. By contrast, Sri Lanka’s annual effect of slowing investment and weak manufacturing growth picked up to a 7.3 percent pace in 2013 from 6.3 performance on GDP growth in 2013 was partially offset percent the previous year, led by services, stronger by robust agricultural growth and a positive contribution manufacturing activity and a pickup in domestic demand to growth from net exports. India’s GDP growth (in part reflecting easing of monetary policy), and robust (measured at factor cost) of 4.7 percent in the 2013-14 agricultural growth. fiscal year ending in March was a modest improvement on the 4.5 percent growth in the previous fiscal year. Currency depreciation and firming high-income demand supported regional exports and activity in the second half of 2013, but the Among other South Asian countries, growth in Pakistan, momentum of exports waned by Q1 2014. Regional industrial the second largest economy, remains below the regional production and exports posted modest gains in the second average but improving, with GDP (measured at factor half of 2013. India’s exports received a temporary boost cost) in the 2013-14 fiscal year estimated to have grown from steep currency depreciation during the second half of 69 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 South Asia 2013 following the U.S Federal Reserve’s “tapering talk” in Figure 2.21 Fixed investment growth in India slowed late May, and from firming demand in high income markedly since 2012 countries. A large current account deficit of 5 percent of Percent (y/y) Percent of GDP 30 40 GDP in 2012 and openness to portfolio capital flows had made India (along with Brazil, Indonesia, South Africa, 25 and Turkey) vulnerable to slowing of capital flows during 35 20 the mid-2013 turmoil. Measures to curb gold imports and policy tightening helped to achieve a sharp current account 15 30 adjustment in the second half of 2013 (to less than 1 10 percent of Q4 2013 GDP). By Q1 2014, the rupee 5 25 appreciated and export momentum waned—but exports picked up again in April. Industrial production momentum 0 20 in India picked up to a 3.4 percent annualized pace in Q1 India investment growth -5 2014 (q/q saar) after contracting in the previous quarter, India inv./GDP 2Q-m.a. [Right] -10 15 but industrial output in March was still 0.5 percent lower 2002Q1 2004Q1 2006Q1 2008Q1 2010Q1 2012Q1 2014Q1 (y/y) than the level a year earlier, reflecting a number of Source: Datastream, Haver Analytics, World Bank. structural constraints. Business sentiment in India Note: Does not include acquisition of valuables such as gold. improved modestly in May reflecting increases in both domestic and export orders, suggesting that industrial Figure 2.22 Gross private capital flows to South Asia activity could strengthen further. have strengthened since Q4 2013 As demand from the Euro Area and U.S improved in the second half of 2013, exports in Bangladesh and Sri Lanka grew rapidly. Bangladesh’s export growth, however, slowed in Q1 2014, partly due to the lagged effect of disruptions caused by political unrest. Pakistan’s export growth slowed more sharply in the first months of 2014 (with a decline in exports in April), reflecting in part pervasive electricity and natural gas shortages. In parallel, Pakistan’s industrial production growth decelerated from 11.2 percent (y/y) at end-2013 to a 2.6 percent decline in March. Capital flows have performed strongly since Q4 2013, reflecting reduced vulnerabilities and improved growth expectations. Mainly Source: Dealogic, World Bank. due to reduced inflows during the mid-2013 financial market turmoil, annual capital flows to the region are Figure 2.23 Equity markets in South Asia gained signifi- estimated to have fallen by 28 percent to $91 billion in cantly since Q4 2013 2013 from $127 billion in 2012—led by a 71 percent decline in portfolio investment (mainly bond) flows and 33 percent fall in bank lending (table 2.13). Equity flows fell by a smaller 12 percent, while foreign direct investment was relatively resilient, rising by 16 percent in 2013. Through the first four months of 2014, gross private capital flows to South Asia have been robust, despite the start of U.S tapering and emerging market financial tensions in January (figure 2.22). Pakistan issued $2 billion of international bonds in April, while Sri Lanka raised $1 billion and $500 million respectively in January and April. Stock markets in the region have risen strongly since Q4 2013 despite some short-lived reversals in early 2014 (figure 2.23). This better performance of capital flows and equity markets may be due to reduced external Source: Datastream, Haver Analytics, World Bank. vulnerability (after current account adjustment in India), expectations of improved growth performance in future, 70 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 South Asia Table 2.13 Net capital flows to South Asia ($ billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Capital Inflows 67.7 67.2 115.0 98.7 126.5 90.6 115.3 123.7 131.6 Foreign direct investment 50.9 39.5 31.3 40.4 27.5 32.0 35.3 38.1 43.6 Portfolio investment -15.7 17.0 36.9 3.6 32.6 9.5 29.8 33.5 33.7 Equity -15.8 24.1 29.9 -4.3 23.3 20.4 23.7 25.7 27.4 Debt instruments 0.1 -7.1 7.0 7.9 9.3 -10.9 6.1 7.8 6.3 Other investment* 32.6 10.7 46.8 54.7 66.4 49.1 50.2 52.1 54.3 o/w Bank lending 11.2 10.8 13.2 18.5 22.7 15.2 12.5 15.7 16.2 Short-term debt flows 7.9 2.6 11.7 22.7 13.4 13.1 15.4 16.7 19.2 Official inflows 8.9 11 10.8 6.6 4 5.9 5.1 4.7 3.8 World Bank 1.4 2.4 3.3 2 0.9 0.5 .. .. .. IMF 3.2 3.6 2 0 -1.5 0.5 .. .. .. Other official 4.2 4.9 5.6 4.5 4.6 4.9 .. .. .. Memo items (as a percentage of GDP) Current account balance -3.2 -1.7 -2.7 -3.1 -4.1 -2.2 -2.0 -2.2 -2.5 Capital inflows 4.4 4.2 5.7 4.4 5.6 3.9 4.5 4.5 4.4 Capital outflows 1.4 1.2 2.0 1.5 1.6 1.0 .. .. .. Source: World Bank. * including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. Note: e = estimate, f = forecast. and continued accommodative policies in high income and a gradual fading of the pass-through effects of the countries and a search for yield. mid-2013 currency depreciation on inflation (see discussion in Special Topic). After peaking at 11.2 and Remittance growth moderated in 2013. The pace of increase in 10.9 percent (y/y) respectively in India and Pakistan in regional migrant remittances (which are an important November 2013, retail inflation fell to about 8 percent in source of foreign currency in several countries) both countries in February, but most recently shows moderated to 2.3 percent in 2013 ($111 billion) from signs of having picked up again. Inflation in Bangladesh 12.1 percent the previous year, mainly reflecting slower declined during the second and third quarters of 2013, growth in annual flows to India (although quarterly flows but picked up since Q4 2013, partly due to disruptions have picked up again since Q2 2013) and a decline in caused by political unrest. Nepal’s inflation rate was close flows to Bangladesh. A part of investment-related to 9 percent in Q1 2014. Region-wide, retail inflation remittances to India were likely diverted to non-resident continues to be influenced heavily by food inflation. bank deposits, which have surged after efforts to Sharp seasonal price fluctuations (especially for mobilize capital since the mid-2013 turmoil. In vegetables and proteins) mostly reflect inefficient supply- Bangladesh, restrictions imposed by countries in the Gulf chains and weak storage infrastructure, while price on the intake of Bangladesh migrants have resulted in increases in grains have been driven in part by increases reduced remittances. Nevertheless, remittances provide a in official minimum support prices. Earlier loose policies vital source of revenues to the smaller countries, for have contributed to entrenching inflationary expectations instance, accounting for a quarter of Nepal’s GDP and at high levels, which influence price- and wage-setting financing more than three-quarters of its goods imports. behavior. By contrast, despite acceleration in growth, Sri Lanka’s inflation fell from 6.7 percent in October 2013 Notwithstanding slower growth and modest policy tightening, to 3.2 percent in May, (partly due to base effects) inflation remains persistently high. Regional inflation peaked although inflation momentum is starting to pick up. in Q4 2013 and declined in subsequent months, helped by: declining international commodity prices; monetary Despite some fiscal consolidation, more remains to be done in South tightening in India and Pakistan (partly in response to Asia. India’s fiscal deficits grew rapidly during the global external pressures); robust domestic agricultural harvests; financial crisis of 2008-09, supporting a sharp post-crisis 71 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 South Asia rebound in GDP growth. This stimulus has been withdrawn business and regulatory environment, and high gradually—although India’s general government deficit in inflation—as well as tightening of international financial 2013 is estimated to be more than 2 percentage points of conditions are likely to act as headwinds. Reforms to GDP higher than in 2007, indicating that depleted fiscal alleviate these structural constraints and to improve buffers have yet to be fully restored. In Pakistan, after the productivity would help to raise the region’s underlying fiscal deficit ballooned to over 8 percent of GDP in FY2011 growth potential. Continued fiscal consolidation would -12, fiscal restraint is estimated to have reduced it to about 6 create additional space for private investment, while percent of GDP in FY2013-14. Sri Lanka’s deficit has also maintaining monetary policy credibility (together with a fallen in recent years, while Nepal’s fiscal balance moved gradual easing of supply-side constraints) would help to into surplus in 2013, partly because of delays caused by reduce entrenched inflationary pressures. insufficient capacity for public expenditure on capital projects. However, sustaining fiscal consolidation could Investment growth is expected to pick up during the forecast horizon prove challenging for various reasons. With the exception of conditional on easing of structural constraints and continued reform Nepal and Maldives, all countries in South Asia face momentum. A large number of projects, particularly in the significant revenue shortfalls vis-à-vis budgeted amounts. infrastructure, steel, and energy sectors, have been stalled South Asian economies raise less tax revenue, relative to in recent years in India. These have contributed to a GDP, than would be expected given their level of economic slowing of investment growth and a rise in stressed loans development (World Bank South Asia Economic Focus Oct. of banks. As these investment projects come on stream 2013 and Apr. 2014). This in part stems from frequent tax during the forecast period (2014-16), overall investment exemptions and rampant tax evasion. Further pressures activity should pick up. In Pakistan, after declining for could arise on the expenditure side if there are demands to several years, the country’s investment rate is projected provide stimulus to support weak growth or there is a failure to rise during the forecast period. The projected gradual to reform subsidies (fuel, food and fertilizer subsidies revival of regional investment growth will depend to a accounted for an estimated 2.2 percent of India’s GDP in large extent on credible efforts to reduce infrastructure FY2013-14). A projected decline in international crude oil and energy supply bottlenecks, create a predictable prices in 2014-16 (see chapter 1) could provide governments regulatory environment, implement labor market in the region with an opportunity to gradually reduce reforms, and continue fiscal consolidation. subsidies without big hits to household pocket books. Measures to simplify the tax system, broaden the tax base, A projected strengthening of external demand will contribute to a and improve compliance can help to raise tax revenues as a pickup in regional exports. South Asia’s exports led by India share of GDP and help in fiscal consolidation. are expected to accelerate during the forecast period, in line with strengthening global import demand, particularly in the U.S and the Euro Area (the two largest Outlook markets for South Asian exports). In Pakistan, preferential market access by the EU (GSP Plus) could help export performance, but energy supply shortages may hamper exporters. In Bangladesh, exports are Together with a projected firming of global growth, regional projected to improve after short-lived effects of political investment is expected to rise helping to gradually boost regional turmoil and transition to better compliance with factory growth to 5.3 percent in 2014 and to about 6 percent in 2015 and safety standards and working conditions. But upward 2016. A substantially weaker than average carry-over and wage pressures in absence of productivity gains could a weak start to the year in India, the largest regional erode its competitiveness in global markets. economy, means that even though its quarterly growth is expected to pick up during the course of the 2014 Consumption growth is expected to rise during the forecast period, calendar year, the level of annual GDP growth for India, but the near term outlook is dependent on monsoon rains. A and in turn, for South Asia, would rise only modestly in projected gradual increase in regional consumption 2014 (table 2.14). Over the medium-term, regional GDP growth reflects increased income growth as overall is forecast to strengthen to 5.9 percent in 2015 and 6.3 growth picks up, and a modest reduction in inflation percent in 2016 (with the acceleration focused mainly on helped by a projected decline in international non-oil India), supported by a gradual pickup of domestic commodity and crude oil prices. The fall in inflation investment and stronger demand in the U.S. and Euro will depend on whether monetary credibility is Area. But a variety of domestic factors—including supply maintained, fiscal consolidation continues, and there are -side constraints in physical infrastructure and human resolute efforts to address supply-side constraints. In capital, electricity and natural gas shortages, a weak the baseline forecasts for 2014, agricultural production 72 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 South Asia Table 2.14 South Asia forecast summary (annual percent change unless indicated otherwise) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b,e GDP at market prices 5.9 9.7 7.3 5.0 4.7 5.3 5.9 6.3 GDP per capita (units in US$) 4.4 8.2 5.8 3.5 3.3 3.9 4.5 5.0 PPP GDPc 5.8 9.6 7.3 4.9 4.7 5.3 5.9 6.3 Private consumption 5.2 6.8 9.0 5.4 4.1 5.3 5.9 6.2 Public consumption 5.6 6.9 6.0 7.5 4.7 5.3 5.6 5.8 Fixed investment 8.9 14.7 10.7 4.4 -0.3 2.9 6.0 7.1 Exports, GNFSd 11.6 13.3 17.9 7.2 5.5 6.7 6.6 7.0 Imports, GNFSd 9.4 15.5 16.0 9.4 -0.1 4.1 6.3 7.0 Net exports, contribution to growth -0.2 -1.4 -0.7 -1.2 1.4 0.4 -0.3 -0.4 Current account bal/GDP (%) -0.6 -2.7 -3.1 -4.1 -2.2 -2.0 -2.2 -2.5 GDP deflator (median, LCU) 6.5 9.7 8.9 7.4 7.4 6.4 6.2 6.3 Fiscal balance/GDP (%) -7.4 -7.8 -7.5 -7.2 -6.9 -6.7 -6.6 -6.4 Memo items: GDP at market pricese South Asia excluding India 4.4 4.3 5.1 5.5 5.3 4.9 5.1 5.2 India (at factor cost) 7.3 8.9 6.7 4.5 4.7 5.5 6.3 6.6 Pakistan (at factor cost) 4.9 2.6 3.6 3.8 3.7 3.7 3.9 4.0 Bangladesh 5.2 6.1 6.7 6.2 6.0 5.4 5.9 6.2 Source: World Bank. a. Growth rates over intervals are compound weighted averages; average growth contributions, ratios and deflators are calculated as simple averages of the annual weighted averages for the region. b. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. c. GDP measured at PPP exchange rates. d. Exports and imports of goods and non-factor services (GNFS). e. National income and product account data refer to fiscal years (FY) for the South Asian countries, while aggregates are presented in calendar year (CY) terms. The fiscal year runs from July 1 through June 30 in Bangladesh, Bhutan, and Pakistan, from July 16 through July 15 in Nepal, and April 1 through March 31 in India. Due to reporting practices, Bangladesh, Bhutan, Nepal, and Pakistan report FY2012/13 data in CY2013, while India reports FY2012/13 in CY2012. growth is expected to be marginally lower than the Overall, GDP in most South Asian countries is expected to longer-term average, with limited impact on expand in line with underlying potential. GDP growth in the consumption and GDP growth. However, if rains are largest regional economy India (measured at factor cost) well below average due to El Niño weather conditions, is projected to rise to 5.5 percent in the 2014-15 fiscal it could significantly moderate agricultural and overall year, after remaining below 5 percent for two consecutive GDP growth (see below). years, as investment and exports pick up during the course of 2014. India’s growth is projected to accelerate Capital flows are expected to remain below 2012 levels as a share to 6.3 percent in FY2015-16 and 6.6 percent in FY2016- of regional GDP, as international financial conditions tighten. 17. This forecast assumes that reforms are undertaken to After falling by more than a quarter in 2013, capital flows ease supply-side constraints (particularly in energy and to South Asia are forecast to rebound by 27 percent in infrastructure), improve productivity, and strengthen the USD terms in 2014 to $115 billion (4.5 percent of GDP). business environment, and that fiscal consolidation In the medium-term, flows would rise broadly in line continues and a credible monetary policy stance is with GDP to 4.5 percent of GDP in 2016—below the maintained. Medium-term growth in Pakistan and Nepal level of 5.6 percent of GDP in 2012, mainly reflecting is projected at about 4 percent, and in Bangladesh at tighter international financial conditions. Incentives of about 6 percent, broadly in line with potential growth. In international investors to repatriate capital will maintain Sri Lanka, where output is currently above potential, pressure on emerging market financial assets and annual growth is forecast to remain broadly stable at 7.2 exchange rates. A credible monetary policy stance and percent in 2014, and over time, to moderate to about 6.7 gradual reduction of fiscal deficits would help to reduce percent by 2016, slightly higher than estimates of both external vulnerabilities and inflationary pressures. medium-term potential growth for the country. 73 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 South Asia In Afghanistan, uncertainty surrounding the political and security transition in 2014 is expected to see growth Figure 2.24 Stressed loans are more than 10 percent of loans in four South Asian countries remain weak at 3.2 percent in 2014. Assuming a smooth Stressed loans as percent of total loans (H2 2013) transition on both fronts, agriculture, services, and the 14 mining sector would contribute to a pickup in growth to Restructured loans 4.6 percent by 2016. Bhutan’s growth eased to 5.6 12 Non-performing loans percent in FY2012-13 from 6.5 percent the previous 10 fiscal year, in part due to policy efforts to moderate credit expansion and a rupee shortage. Growth is projected to 8 pick up to a 6.8 percent pace in FY2013-14 and then rise to 8 percent by FY2015-16, supported by investment in 6 hydropower projects. Maldives’ outlook is positive, with 4 growth projected at 4.5 percent in 2014. This will be driven by strong tourist arrivals, particularly by robust 2 growth in the Chinese tourist segment. In the medium 0 term, the economy is projected to grow at a more Nepal Sri Lanka Afghanistan India Bangladesh Bhutan Pakistan sustainable pace of about 4 percent annually, as tourism Source: IMF, World Bank estimates based on national sources. revenues from Europe pick up. Risks although there is anecdotal evidence of substantial “ever - greening” of problem loans by banks. Recognizing restructured and problem loans as NPLs in South Asian countries would increase capital needs (with possible El Niño is a key near-term risk for regional growth prospects. need for fiscal support), but is essential for the banking Weak monsoon rains can have significant impacts on system to provide adequate financing for a resumption of agricultural production, consumption, and GDP growth. the investment cycle. Institutional reforms, including Although the share of agriculture in GDP has declined strengthening human resources, systems, and NPL progressively in recent decades, its large share of overall management and capitalization—including in India employment in the region implies that weaker than where state-owned banks account for close to three- average monsoons, perhaps triggered by El Niño weather quarters of banking assets—would also help to improve conditions, could reduce regional GDP growth by half a financial intermediation and availability of credit for the percentage point or more (as of May, the likelihood of El private sector. Other domestic risks to the outlook Niño conditions in 2014-15 was assessed at 60-70 include a slow pace of reforms in the region and security percent). Strong El Niño conditions resulting in deficient uncertainties in Afghanistan and, to a lesser extent, in rainfalls or drought can have more significant impacts. Pakistan. Although ample grain stocks should mitigate adverse effects on food security, weak agricultural performance External risks include both geopolitical and financial risks. Given could keep food inflation, and in turn, retail inflation, the reliance of the South Asia region on imported crude high—perhaps necessitating a tighter monetary policy oil, it remains vulnerable to political developments in stance than otherwise, which may have adverse Ukraine and Russia that could result in tighter implications for investment and growth. international oil supplies. An escalation of geopolitical tensions that cause crude oil prices to spike can Domestic downside risks include stressed banking sectors, slow pace significantly impact current account sustainability in the of reforms, and security uncertainties. Weak economic growth region. Financial market volatility on the path to in recent years has taken a toll on corporate and bank monetary policy normalization in high income countries balance sheets. Stressed bank loans (including represents another external risk for the region. A restructured loans) exceed 10 percent of loans in disorderly adjustment to policy normalization in the U.S. Bangladesh, Bhutan, India, and Pakistan (figure 2.24). can cause capital flows to fall sharply, with adverse Non-performing loans (NPLs) in Bangladesh are effects on exchange rates, perhaps necessitating a concentrated in state-owned banks, which account for tightening of monetary policy. A sharp slowdown in about a third of banking sector assets. NPLs as a share of China’s growth would represent a risk for the global total loans were the lowest in Nepal at 3.1 percent, economy, and in turn, for regional growth prospects. 74 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table 2.15 South Asia country forecasts 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b Calendar year basis Afghanistan GDP at market prices (% annual growth)c 11.9 8.4 6.1 14.4 3.6 3.2 4.2 4.6 Current account bal/GDP (%) -0.3 2.8 3.1 3.9 3.6 3.0 -0.5 -2.0 Bangladesh GDP at market prices (% annual growth)c 5.2 6.4 6.5 6.1 5.7 5.7 6.1 6.2 Current account bal/GDP (%) 0.6 1.8 -0.1 1.9 2.1 0.9 0.6 0.3 Bhutan GDP at market prices (% annual growth)c 8.2 11.7 8.6 4.6 6.5 7.2 7.8 8.0 Current account bal/GDP (%) -12.7 -26.5 -25.3 -22.5 -22.2 -21.6 -20.7 -19.8 India GDP at factor cost (% annual growth)c 7.4 9.3 7.7 4.8 4.7 5.3 6.1 6.6 Current account bal/GDP (%) -0.5 -3.2 -3.4 -5.0 -2.6 -2.2 -2.5 -2.9 Maldives GDP at market prices (% annual growth)c 6.3 7.1 6.5 3.4 3.7 4.5 4.2 4.1 Current account bal/GDP (%) -14.4 -9.2 -19.1 -23.0 -20.5 -19.5 -19.0 -18.5 Nepal GDP at market prices (% annual growth)c 3.4 4.1 4.1 4.2 4.0 4.4 4.3 4.3 Current account bal/GDP (%) 0.6 -0.8 1.4 3.4 3.7 2.8 2.0 1.1 Pakistan GDP at factor cost (% annual growth)c 4.9 2.2 3.1 4.0 4.1 3.8 3.9 4.0 Current account bal/GDP (%) -1.3 -0.7 -1.0 -1.0 -1.9 -1.8 -1.7 -1.5 Sri Lanka GDP at market prices (% annual growth)c 4.4 8.0 8.2 6.3 7.3 7.2 6.9 6.7 Current account bal/GDP (%) -3.4 -2.2 -7.8 -6.6 -3.9 -3.8 -3.5 -3.3 Fiscal year basis b Bangladesh GDP at market prices (% annual growth)c 5.2 6.1 6.7 6.2 6.0 5.4 5.9 6.2 Bhutan GDP at market prices (% annual growth)c 8.2 9.3 10.1 6.5 5.6 6.8 7.6 8.0 India GDP at factor cost (% annual growth)c 7.3 8.9 6.7 4.5 4.7 5.5 6.3 6.6 Nepal GDP at market prices (% annual growth)c 3.4 4.8 3.4 4.9 3.6 4.5 4.3 4.3 Pakistan GDP at factor cost (% annual growth)c 4.9 2.6 3.6 3.8 3.7 3.7 3.9 4.0 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. National income and product account data refer to fiscal years (FY) for the South Asian countries with the exception of Afghanistan, Maldives and Sri Lanka, which report in calendar year (CY). The fiscal year runs from July 1 through June 30 in Bangladesh, Bhutan, and Pakistan, from July 16 through July 15 in Nepal, and April 1 through March 31 in India. Due to reporting practices, Bangladesh, Bhutan, Nepal, and Pakistan report FY2012/13 data in CY2013, while India reports FY2012/13 in CY2012. GDP figures presented in calendar years (CY) terms for Bangladesh, Nepal, and Pakistan are calculated taking the average growth over the two fiscal year periods to provide an approximation of CY activity. Historical GDP data in CY terms for India are the sum of GDP in the four calendar quarters and for Bhutan are actual calendar year data, while forecasts in CY terms for these two countries are based on average growth rates of corresponding fiscal years. c. GDP measured in constant 2010 U.S. dollars. 75 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Sub-Saharan Africa’s GDP grew 4.7 percent in 2013 led by robust domestic demand, and is set to continue to rise. Despite emerging challenges, the medium-term outlook remains positive. Supported by investment in the resource sector, public infrastructure, and agriculture, GDP growth is projected to remain stable at 4.7 percent in 2014 and to rise to 5.1 percent in 2015 and 2016. The outlook is sensitive to downside risks from lower commodity prices, tightening global financial conditions, and political instability. Recent developments Robust investment in the resource sector and public infrastructure supported growth in the region. Capital inflows to the region remained strong in 2013, at 5.8 percent of regional GDP, but were less than the 6.4 percent of regional GDP in Sub-Saharan Africa experienced robust economic growth in 2012 due to a decrease in portfolio debt inflows to South 2013 and looks set to continue to expand against the Africa. After declining by 8.6 percent in 2012, net foreign backdrop of the global recovery but faces significant direct investment inflows to the region grew by 10.7 headwinds. GDP growth in the region strengthened to 4.7 percent in 2013 after rising 3.7 percent in 2012. 1 Growth was broad-based with more than a third of the countries in the region expanding by Figure 2.25 Real GDP growth strengthened in Sub-Saharan Africa in 2013 5.0 percent or more. However, due to conflict, economic activity contracted sharply in the Central African Republic. South Sudan’s oil economy was disrupted by the civil war that erupted toward the end of the year. In South Africa, the region’s second largest economy, growth slowed notably owing to structural bottlenecks, tense labor relations, and low consumer and investor confidence. Excluding South Africa, average GDP growth for the rest of the region in 2013 was 6.0 percent, second only to developing East Asia and Pacific at 7.2 percent (figure 2.25). 1. Regional aggregates are based on Nigeria’s old national accounts. They will be updated to reflect the rebasing of Nigeria’s GDP in the Source: World Bank. next edition of the Global Economic Prospects report. 77 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Sub-Saharan Africa Table 2.16 Net capital flows to Sub-Saharan Africa ($billions) 2008 2009 2010 2011 2012 2013e 2014f 2015f 2016f Capital Inflows 47.0 59.4 44.9 68.2 82.5 75.9 72.2 77.4 83.8 Foreign direct investment 33.6 30.2 24.0 31.5 28.8 31.9 32.5 35.6 38.4 Portfolio investment -6.4 14.7 19.0 13.0 30.3 23.8 20.8 22.3 22.3 Equity -5.7 10.5 8.2 -1.0 9.4 13.5 13.7 14.8 15.1 Debt instruments -0.7 4.1 10.9 14.0 20.9 10.2 7.1 7.5 7.2 Other investment* 19.8 14.6 2.0 23.7 23.4 20.2 18.9 19.5 23.1 o/w Bank lending 2.5 1.7 1.2 3.5 4.6 5.7 5.5 6.1 7.4 Short-term debt flows 1.9 -5.5 3.0 1.6 8.0 6.2 5.8 4.1 4.5 Official inflows 5 10.2 13.5 12.8 11 10.1 10.6 11.4 11.0 World Bank 1.9 3.1 4 3.2 3.9 3.5 .. .. .. IMF 0.7 2.2 1.2 1.4 0.9 0.5 .. .. .. Other official 2.5 4.9 8.3 8.2 6.2 6.1 .. .. .. Memo items (as a percentage of GDP) Current account balance -1.5 -3.9 -1.3 -1.1 -2.4 -3.0 -3.2 -3.9 -4.1 Capital inflows 4.9 6.5 4.1 5.5 6.4 5.8 5.2 5.3 5.4 Capital outflows 2.3 1.8 3.0 3.1 2.7 2.8 .. .. .. Source: World Bank. * including short-term and long-term private loans, official loans, other equity and debt instruments, and financial derivatives and employee stock options. Note: e = estimate, f = forecast. percent to $31.9 billion in 2013 (table 2.16), boosted in countries, resulting in low fiscal buffers that have limited part by new hydrocarbon discoveries in several countries the scope for policy response in the event of exogenous including Mozambique and Tanzania. In addition to FDI shocks. In Zambia, for example, the government flows, governments across the region continued to increased civil servants’ salaries by 45 percent in 2013, expand public infrastructure investment including in putting public finances on an unsustainable path. roads, energy and ports. Gross fixed capital formation expanded by an estimated 5.1 percent in 2013, reaching Partly as a result of rising fiscal deficits the debt to GDP ratios 23.5 percent of GDP. remained elevated in many countries as government borrowing rose. To finance rising levels of expenditure, many countries in Increased remittances and low interest rates continued to boost the region borrowed heavily on the domestic market, the consumer sector in most low-income countries in the region. issuing short-term treasury bills at high interest rates After remaining broadly stable in 2012, remittance (Ghana, Mozambique, Senegal). Several of these flows to the region grew 3.5 percent to $32 billion in countries also issued dollar-denominated government 2013, exceeding the record of $30 billion reached in bonds, increasing their reliance to non-concessional debt 2011. Meanwhile, owing in part to lower international (Ghana, Mozambique). Among low-income countries, food and fuel prices, inflation in the region slowed to government debt rose to 43.3 percent of GDP in 7.8 percent in 2013 from 10.7 percent in 2012 (figure Mozambique and to 82.1 percent of GDP in the Gambia 2.26). This prompted central banks in many countries in 2013. Among middle-income countries, public debt to lower interest rates. Private consumption increased rose to 45.9 percent of GDP in Senegal, 60.1 percent of by an estimated 4.8 percent in 2013, contributing to GDP in Ghana, and 95.0 percent of GDP in Cabo an expansion of domestic demand. Verde, raising concerns about debt sustainability and highlighting the need for fiscal consolidation to reduce Fiscal deficits widened across the region and remain a source of vulnerabilities to external headwinds. vulnerability for many countries. Ambitious public investment programs, large increases in public wages, and rising The fall in commodity prices negatively affected the region’s net transfers and subsidies, coupled with weak revenues, export performance contributing to a widening of current contributed to a deterioration of fiscal balances in many account deficits. Most non-energy commodity price 78 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Sub-Saharan Africa indices fell in 2013 (figure 2.27). A large drop was observed in the prices of precious metals (-17 Figure 2.26 Inflation eased in the region in 2013 percent), agriculture (-7.2 percent), and metals (-5.5 percent) while crude oil prices remained broadly unchanged. The fall in commodity prices combined with weak external demand, particularly from China, weighed on export receipts even though on a volume basis exports increased in many countries. Meanwhile, imports rose strongly, driven by robust demand for capital goods, as governments across the region ramped up spending on infrastructure investment. As a result, the regional current account deficit widened from 2.7 percent of GDP in 2012 to 3.4 percent of GDP in 2013. These aggregate figures mask larger deficits in many countries, including in Tanzania and Ghana where the current account deficits were in double digits. The contribution of Source: World Bank. net exports to growth in the region was significantly reduced in 2013 (table 2.17). Figure 2.27 Non-energy commodity prices fell in 2013 The tourism sector grew at a robust pace in 2013, helping to support the balance of payments of many countries in the region. Data from the UN World Tourism Organization shows that international tourist arrivals in Sub- Saharan Africa grew by 5.2 percent in 2013 to a record 36 million, up from 34 million in 2012. This increase was above the average world growth of 5.0 percent, but less than the 6.2 percent growth achieved in 2012. Demand was strong throughout the year, with a moderate slowdown in the second quarter. Leading growth in 2013 were destinations in Rwanda (+13.8 percent), Zimbabwe (+12.5 percent), Seychelles (+10.8 percent), and Cabo Verde (+5.3 percent). Two bouts of market volatility in mid-2013 and early 2014 Source: World Bank. highlighted the need for further efforts to contain fiscal and external imbalances. In May 2013, following the Federal Reserve’s announcement of the tapering of asset purchases, Figure 2.28 Sovereign spreads rose sharply in early 2014, but have begun to decline numerous low-income countries in the region experienced currency depreciations, and some frontier Basis points 450 450 countries with significant foreign investment in local securities markets sustained capital outflows. Sovereign 400 400 spreads rose sharply (figure 2.28) and interest rates increased in Eurobond markets, prompting many countries to postpone the issuance of Eurobonds 350 350 planned for end-2013. Over this period several countries, including Ghana and Zambia, saw their sovereign ratings 300 300 downgraded by international credit agencies on concerns about their weakening fiscal position due to rising 250 250 Emerging markets Sub-Saharan Africa government spending. 200 200 04/01/2013 07/01/2013 10/01/2013 01/01/2014 In the second bout of capital market volatility at the beginning of 2014, the currencies of middle-income countries with higher Source: World Bank. current account deficits and external financing needs came under 79 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Sub-Saharan Africa Table 2.17 Sub-Saharan Africa forecast summary (annual percent change unless indicated otherwise) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f b GDP at market prices 4.5 5.2 4.5 3.7 4.7 4.7 5.1 5.1 (Sub-region totals-- countries with full NIA + BOP data)c GDP at market pricesc 4.5 5.2 4.5 3.7 4.7 4.7 5.1 5.1 GDP per capita (units in US$) 2.2 2.6 1.9 1.1 2.1 2.1 2.5 2.6 PPP GDPc 4.7 5.7 4.9 4.0 5.3 5.2 5.4 5.3 Private consumption 5.4 2.2 4.0 0.6 4.8 4.6 4.3 4.4 Public consumption 5.9 7.0 13.3 2.7 5.8 5.2 4.9 4.8 Fixed investment 7.8 6.6 8.6 7.2 5.1 4.4 5.3 4.8 d Exports, GNFS 3.9 20.6 16.6 0.4 4.7 4.9 5.8 5.7 d Imports, GNFS 7.0 10.0 15.7 -2.4 4.7 4.3 4.4 3.9 Net exports, contribution to growth -0.7 3.1 0.5 1.1 0.1 0.3 0.7 0.8 Current account bal/GDP (%) -0.1 -1.0 -0.7 -2.7 -3.4 -3.6 -4.3 -4.4 GDP deflator (median, LCU) 6.5 7.2 6.9 5.3 4.4 6.1 5.5 5.7 Fiscal balance/GDP (%) -0.4 -3.7 -1.3 -2.8 -3.0 -2.7 -2.5 -2.5 Memo items: GDP SSA excluding South Africa 5.2 6.1 5.0 4.2 6.0 5.8 5.9 5.7 Broader geographic region 4.6 5.1 4.5 3.6 4.6 4.6 5.0 5.0 (incl. recently high income countries)e Oil exportersf 5.7 6.0 4.0 3.0 6.2 6.0 6.0 5.7 CFA countriesg 3.8 4.9 2.5 5.3 3.9 5.0 5.0 4.5 South Africa 3.2 3.1 3.5 2.5 1.9 2.0 3.0 3.5 Nigeria 5.7 7.8 6.8 6.5 7.0 6.7 6.5 6.1 Angola 10.9 3.4 3.9 6.8 4.1 5.2 6.5 6.8 Source: World Bank. a. Growth rates over intervals are compound weighted averages; average growth contributions, ratios and deflators are calculated as simple averages of the annual weighted averages for the region. b. GDP at market prices and expenditure components are measured in constant 2010 U.S. dollars. c. Sub-region aggregate excludes Liberia, Chad, Somalia, Central African Republic, and São Tomé and Principe. Data limitations prevent the forecasting of GDP components or Balance of Payments details for these countries. d. Exports and imports of goods and non-factor services (GNFS). e. Recently high-income countries include Equatorial Guinea. f. Oil Exporters: Angola, Cote d Ivoire, Cameroon, Congo, Rep., Gabon, Nigeria, Sudan, Chad, Congo, Dem. Rep. g. CFA Countries: Benin, Burkina Faso, Central African Republic, Cote d Ivoire, Cameroon, Congo, Rep., Gabon, Equatorial Guinea, Mali, Niger, Senegal, Chad, Togo. more pressure, indicating that markets were already With global liquidity conditions tightening, capital flows fell sharply differentiating between countries on the basis of in the first quarter of 2014 compared with last year, suggesting political risks (South Africa, Zambia), macroeconomic changing investors’ sentiment toward the region. Sovereign imbalances (Ghana), and the pace of reforms (South spreads rose again at the beginning of the year in frontier Africa). The South African rand, Ghanaian cedi, and countries but not as sharply as during the May-June Zambian kwacha sustained further losses in January. episode, and then fell steadily to their pre-crisis level The Nigerian naira also depreciated rapidly, reflecting (figure 2.28). In this environment, Zambia undertook concerns about policy uncertainty. Currency Sub-Saharan Africa’s first sovereign debt issuance of the depreciations and inflation worries prompted the year, raising US$1.0 billion through the sale of 10-year central bank in these countries to hike interest rates, dollar denominated bonds priced at 8.625 percent, by 50 basis points in South Africa, 200 basis points in compared with 5.342 percent on its maiden bond Ghana, and 50 basis points in Zambia. In Nigeria, the issuance in 2012. The increased cost of borrowing central bank continued its tight monetary policy, reflected country-specific risks, including concerns about leaving the policy rate unchanged at 12 percent. the country’s rising budget deficit. 80 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Sub-Saharan Africa Outlook by 5.8 percent in 2013, public consumption is projected to slow to 5.0 percent on average in 2014-16. Reflecting these trends, the regional fiscal deficit is projected to narrow to 2.5 percent of GDP over the forecast horizon. Despite emerging challenges, medium-term growth prospects for Sub- Saharan Africa remain favorable. Domestic demand, The contribution of net exports to GDP growth is projected to rise underpinned by investment in the resource sector and over the forecast horizon. On the export side, commodity infrastructure and expansion in the agriculture sector, will prices are projected to remain low in 2014. Notably, the continue to drive growth in most countries in the region. prices of metals and precious metals are projected to fall External demand is also expected to be supportive of further, by 6½ percent for copper and by more than 11½ growth in the region. The strengthening recovery in high- percent for gold. Overall export prices are projected to income countries bodes well for export demand and fall by 1.0 percent on average in the region. Partly as a investment flows. For the majority of countries in the result of these factors, export growth is expected to slow region, the impact of tighter global financing conditions in 2014. On the import side, prices are projected to fall is likely to be limited partly because foreign direct marginally, with import demand remaining buoyant investment, the dominant type of capital inflows for the despite sharp currency depreciations in some countries. region, tends to be less sensitive to global interest rate The terms of trade are projected to decline in most hikes than short-term portfolio flows. Still, owing to countries in the region in 2014, especially in base and weaker commodity prices and slower growth in emerging precious metal producing countries, leading to a widening markets, FDI flows are expected to slow. In this of the trade deficit in these countries. The contribution environment, FDI flows in the region are projected to of next exports to growth in the region is projected to rise moderately to $32.5 billion in 2014, which would remain modest in 2014 but to improve thereafter as nevertheless support growth in many countries. Besides exports expand, buoyed by a strengthening of external FDI, the continued focus on expanding public demand from high income countries and emerging infrastructure to ease supply bottlenecks and improved markets, and import growth slows as investment projects agricultural production are expected to provide further mature. This improvement will not, however, be impetus to growth. Overall, GDP growth in the region is sufficient to rein in current account deficits, projected to projected to remain broadly stable at 4.7 percent in 2014 rise to 4.4 percent of regional GDP by 2016. and to rise moderately to 5.1 percent in 2015 and 2016. Growth in the region is projected to be led not just by resource-rich Private consumption is projected to remain robust in most countries in countries, but also by low-income countries and fragile countries that the region, underpinned by a growing population, improving real per have improved political and security stability. At the sub-regional capita incomes, and continued price stability. Improved agricultural level, growth is projected to be strong in East Africa, production and stable exchange rates are expected to help increasingly supported by FDI flows into offshore natural contain inflationary pressures in low-income countries. gas resources in Tanzania, and the onset of oil production Prices are trending higher in several middle income in Kenya and Uganda. Ethiopia is projected to be among countries due in part to lagged pass-through effects from the fastest growing countries, with growth underpinned by currency depreciations. In Ghana, inflation rose to 14.7 strong public investment supporting agriculture and percent year-on-year in April, and further increases are infrastructure. Tight monetary policy combined with labor expected in view of the vulnerability of the cedi. In South strikes and deficient electricity supply will keep growth Africa, consumer price inflation breached the central bank’s subdued in South Africa. In Angola, following a slowdown 6.0 percent upper limit in April. Nevertheless, the outlook in 2013, growth is projected to pick up moderately in 2014 is for prices to remain broadly stable across the region supported by a rebound in oil production. In Nigeria, owing to lower commodity prices, which should help to which became the region’s largest economy following the keep interest rates low. Combined with steadily rising rebasing of its GDP (box 2.2), growth is projected to remittances, projected to reach $35.0 billion in 2014, these remain robust led by the non-oil sectors. effects should stimulate private consumption and permit a robust expansion of domestic demand. Overall, real GDP growth in the region is projected to remain stronger than in many other developing regions, allowing for some gains in real Government consumption is projected to rise at a moderate pace. per capita incomes. Poor physical infrastructure will, however, Governments in many countries, including Ghana, continue to limit the region’s growth potential. While fixed Zambia and Senegal, are planning to carry out fiscal investment has increased in recent years, a further scaling up consolidation measures to bring public expenditures to of infrastructure spending is needed in most countries in the sustainable levels and restore fiscal buffers. After rising region if they are to achieve a lasting transformation of their 81 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Sub-Saharan Africa Box 2.2 New GDP figures show that Nigeria’s economy is almost twice as big as previously estimated Past calculations used value weights and a base year for prices from almost 25 years ago, now updated to reflect the current (2010) structure of the economy. As a result of these changes, nominal GDP for 2013 is now estimated at US$509 billion, 89 percent larger than previously thought, making Nigeria the largest economy in Sub -Saharan Africa and the world’s 26th largest economy (measured at market exchange rates). The rebasing brought into focus the extent of economic transformations in Nigeria over the past two decades. For example, at 21.5 and 16.4 percent of GDP, re- spectively, crop production and trade are now individually larger than oil production (at 15.6 percent of GDP). The revi- sion has positive implications for income -per-capita and debt -to-GDP ratios but reduces the estimate of the GDP share of fiscal income. In 2010, Ghana conducted a similar exercise that showed that its economy was 63 percent larger, resulting in its reclassification as a low middle income country. The size of the Zambian economy, Africa’s second -largest copper producer, also increased by 25 percent following data revisions in February. Kenya will soon conclude its own review possibly resulting in its reclassification to middle income status. These revisions have important policy ramifications and could consolidate investors’ confidence, but do not lessen current concerns regarding growth bottlenecks, weak govern- ance and macroeconomic imbalances. economies. The region’s infrastructure deficit is most acute Tighter monetary conditions: Increased capital market in energy and road sectors. Addressing these needs in a volatility associated with the tapering of quantitative sustainable manner will require increasing both revenue and easing in the U.S. remains a significant downside risk to the efficiency of public investment. Improving the public the regional outlook. Capital flow volatility has already investment management system will be critical to ensure that led to sharp policy adjustments in emerging and frontier resources are allocated to productive public investments. market countries in the region. A rapid and disorderly Concerns about the quality of public infrastructure rise in interest rates or reversal of capital flows remains a investments and the capacity to implement them highlight concern for these countries. Simulations conducted for the need to strengthen ongoing public financial management the January 2014 Global Economic Prospects Report reforms in the region aimed at enhancing project appraisal, suggest that a sudden 100 basis points increase in U.S. and monitoring of project execution as well as transparency bond yields could lower capital inflows to developing and accountability in the use of public resources. countries by about 50 percent, which could lead to lower investment and growth. Risks On the domestic front, higher inflation presents a significant downside risk as it could lead to further policy tightening in many countries. Prices are on the rise in many countries, triggered in part by lagged pass-through from large The risks to the region’s outlook are significant and stem from both currency depreciations stemming from fiscal and external external and domestic factors. External factors include lower imbalances, and also by higher food prices. Larger commodity prices brought on by weaker growth in currency depreciations and higher food prices than emerging markets, and increased market volatility anticipated could result in higher inflation across the accompanying the tightening of global monetary region than assumed in the baseline, prompting central conditions. Political instability, conflicts, and inflation are banks to raise interest rates that could curtail demand. among the major domestic risks. Domestic risks associated with social and political unrest as well as Lower commodity prices: Weaker demand combined with emerging security problems remain a major threat to the economic increased supply could lead to a sharper decline in prospects of a number of countries in the region. In South Sudan, commodity prices than assumed in the baseline forecast. In for example, violence has continued to disrupt the oil particular, if Chinese demand, which accounts for some 45 economy. With the outlook for a political settlement percent of global copper demand and a large share of global remaining poor, the conflict could spread and disrupt demand for precious metals, remains weaker than in recent trade in the sub-region. In Nigeria, the national, state and years and supply continues to grow robustly, the decline in local elections that will take place in 2015 are increasing the price of copper and precious metals could be more policy uncertainty, which could slow private investment; pronounced than forecast with significant negative while the Islamist insurgency in the north may spur consequences for metal producing countries. violence across the sub-region. 82 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table 2.18 Sub-Saharan Africa country forecasts 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Angola GDP at market prices (% annual growth)b 10.9 3.4 3.9 6.8 4.1 5.2 6.5 6.8 Current account bal/GDP (%) 5.0 9.1 12.6 11.5 8.6 8.8 5.8 3.8 Benin GDP at market prices (% annual growth)b 3.6 2.6 3.5 5.4 4.0 4.5 4.4 4.3 Current account bal/GDP (%) -7.0 -8.1 -7.1 -7.4 -5.4 -5.8 -5.7 -3.8 Botswana GDP at market prices (% annual growth)b 3.5 7.3 5.1 4.2 4.2 4.1 4.0 4.2 Current account bal/GDP (%) 8.0 -2.1 -2.1 -6.9 -1.4 -1.1 -0.9 -0.1 Burkina Faso GDP at market prices (% annual growth)b 5.2 7.9 4.2 9.5 6.6 6.7 6.5 6.3 Current account bal/GDP (%) -9.5 -2.0 -0.1 -1.1 -1.3 -2.4 -2.7 -2.0 Burundi GDP at market prices (% annual growth)b 2.9 3.8 4.2 4.0 4.5 4.0 3.7 3.0 Current account bal/GDP (%) -4.6 -14.8 -12.0 -10.3 -10.9 -9.7 -8.9 -7.9 Cabo Verde GDP at market prices (% annual growth)b 6.0 3.7 4.5 2.5 1.7 2.5 2.2 4.0 Current account bal/GDP (%) -10.0 -13.4 -16.3 -11.5 -8.3 -5.2 -3.2 0.0 Cameroon GDP at market prices (% annual growth)b 2.9 3.3 4.1 4.6 4.7 4.9 5.1 5.0 Current account bal/GDP (%) -2.4 -3.8 -3.0 -3.8 -3.6 -2.9 -2.3 -1.8 Chad GDP at market prices (2005 US$)b 9.1 13.6 2.4 4.6 3.6 8.5 7.7 6.4 Current account bal/GDP (%) -13.5 -32.2 -13.0 -19.5 -18.2 -10.2 1.9 1.9 Comoros GDP at market prices (% annual growth)b 1.8 2.1 2.2 3.0 3.3 3.5 3.5 3.2 Current account bal/GDP (%) -11.9 10.1 14.7 -46.2 -12.8 -12.3 -11.9 -10.9 Congo, Dem. Rep. GDP at market prices (% annual growth)b 4.2 7.2 6.9 7.2 6.5 6.0 5.0 4.4 Current account bal/GDP (%) 0.6 -16.5 -8.2 -9.9 -10.5 -10.6 -11.4 -11.6 Congo, Rep. GDP at market prices (% annual growth)b 3.8 8.8 3.4 3.8 3.5 5.9 7.4 4.9 Current account bal/GDP (%) -4.9 -34.4 25.7 -2.0 -0.1 0.5 1.5 0.6 Cote d Ivoire GDP at market prices (% annual growth)b 0.8 2.4 -4.7 9.5 8.7 7.4 5.9 4.0 Current account bal/GDP (%) 1.8 2.0 1.1 -1.8 -3.3 -4.3 -3.5 -2.9 Equatorial Guinea GDP at market prices (% annual growth)b 15.0 -1.7 4.9 2.5 -4.9 -4.3 -2.0 -0.1 Current account bal/GDP (%) 11.2 -24.7 -14.6 -13.5 -10.7 -4.1 0.5 4.2 Eritrea GDP at market prices (% annual growth)b 0.7 2.2 8.7 7.0 3.6 3.5 3.0 2.0 Current account bal/GDP (%) -20.9 -5.5 3.3 11.9 5.5 2.7 4.8 4.8 Ethiopia GDP at market prices (% annual growth)b 7.6 12.6 11.2 8.7 9.7 7.4 7.0 6.6 Current account bal/GDP (%) -5.1 -1.3 -1.9 -5.5 -6.1 -7.1 -7.0 -7.0 Gabon GDP at market prices (% annual growth)b 1.3 6.7 7.1 5.6 3.5 3.6 3.7 3.7 Current account bal/GDP (%) 14.9 5.8 11.3 14.0 7.4 6.6 3.6 3.5 83 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Gambia, The GDP at market prices (% annual growth)b 3.2 6.5 -4.3 5.3 6.2 6.5 6.0 5.0 Current account bal/GDP (%) -2.3 5.9 12.2 6.5 0.8 -1.4 -3.9 2.6 Ghana GDP at market prices (% annual growth)b 5.0 8.0 15.0 7.9 7.1 5.0 7.3 7.5 Current account bal/GDP (%) -13.8 -11.0 -10.9 -11.7 -13.4 -12.5 -10.5 -8.8 Guinea GDP at market prices (% annual growth)b 2.4 1.9 3.9 3.9 2.6 4.6 5.2 5.5 Current account bal/GDP (%) -6.9 -6.9 -22.9 -18.5 -20.3 -18.3 -22.5 -39.2 Guinea-Bissau GDP at market prices (% annual growth)b 2.3 1.7 4.8 -6.7 0.3 2.5 2.7 2.7 Current account bal/GDP (%) 0.1 -8.5 -1.4 -5.0 -4.9 -4.8 -4.5 -3.3 Kenya GDP at market prices (% annual growth)b 3.6 5.8 4.4 4.6 4.7 5.0 4.7 4.0 Current account bal/GDP (%) -2.4 -7.4 -11.4 -10.4 -7.7 -8.1 -8.0 -8.2 Lesotho GDP at market prices (% annual growth)b 3.3 7.9 3.7 4.0 4.1 4.2 4.4 4.1 Current account bal/GDP (%) 4.8 -18.4 -18.2 -24.1 -12.1 -8.9 -6.7 -4.0 Madagascar GDP at market prices (% annual growth)b 2.5 0.5 1.9 3.1 2.8 4.0 4.5 4.5 Current account bal/GDP (%) -11.8 -7.9 -4.1 -3.9 -5.8 -9.2 -11.2 -7.5 Malawi GDP at market prices (% annual growth)b 3.8 -9.5 4.3 1.9 4.2 4.4 4.6 4.7 Current account bal/GDP (%) -10.5 -14.6 -13.6 -19.0 -17.1 -16.7 -16.2 -14.5 Mali GDP at market prices (% annual growth)b 5.4 5.8 2.7 -0.4 1.8 6.6 5.8 5.7 Current account bal/GDP (%) -8.1 -12.6 -6.1 -3.6 -8.6 -9.0 -9.0 -8.9 Mauritania GDP at market prices (% annual growth)b 4.5 5.1 4.0 7.6 5.7 4.4 3.7 3.1 Current account bal/GDP (%) -10.9 -5.9 -1.8 -25.3 -28.1 -27.9 -26.0 -25.5 Mauritius GDP at market prices (% annual growth)b 3.4 4.1 3.9 3.2 3.2 3.7 4.1 4.2 Current account bal/GDP (%) -2.7 -10.3 -13.4 -11.4 -10.2 -9.2 -8.4 -8.4 Mozambique GDP at market prices (% annual growth)b 7.1 7.1 7.3 7.4 7.1 8.1 8.6 8.4 Current account bal/GDP (%) -14.0 -15.6 -23.8 -43.5 -43.1 -41.1 -38.7 -36.8 Namibia GDP at market prices (% annual growth)b 3.9 6.3 5.7 5.0 4.2 3.4 3.5 3.3 Current account bal/GDP (%) 4.7 1.0 -1.2 0.6 -4.0 -2.6 -2.2 -0.4 Niger GDP at market prices (% annual growth)b 3.7 8.4 2.3 10.8 3.6 6.2 6.0 5.6 Current account bal/GDP (%) -9.6 -19.9 -26.7 -20.6 -20.8 -20.8 -20.3 -19.1 Nigeria GDP at market prices (% annual growth)b 5.7 7.8 6.8 6.5 7.0 6.7 6.5 6.1 Current account bal/GDP (%) 14.4 6.3 5.1 7.8 5.4 4.2 1.0 0.8 Rwanda GDP at market prices (% annual growth)b 7.2 7.2 8.2 8.0 5.0 7.2 7.4 7.4 Current account bal/GDP (%) -5.3 -7.4 -7.5 -11.6 -8.1 -6.7 -4.9 -3.2 84 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f Senegal GDP at market prices (% annual growth)b 3.7 4.3 2.1 3.5 3.7 4.1 4.3 4.2 Current account bal/GDP (%) -8.0 -4.6 -7.9 -10.0 -9.3 -8.3 -7.9 -7.2 Seychelles GDP at market prices (% annual growth)b 1.4 5.9 7.9 2.8 3.7 3.7 2.9 2.8 Current account bal/GDP (%) -15.4 -22.1 -26.5 -25.1 -17.8 -14.4 -13.1 -9.1 Sierra Leone GDP at market prices (% annual growth)b 5.9 5.4 6.0 15.2 13.3 14.1 10.5 9.2 Current account bal/GDP (%) -4.9 -22.7 -65.1 -28.5 -22.3 -13.7 -10.6 -9.4 South Africa GDP at market prices (% annual growth)b 3.2 3.1 3.5 2.5 1.9 2.0 3.0 3.5 Current account bal/GDP (%) -3.0 -1.9 -2.4 -5.2 -5.3 -5.9 -4.7 -5.0 South Sudan GDP at market prices (% annual growth)b 6.2 4.2 1.6 -42.1 27.0 8.0 8.5 9.0 Current account bal/GDP (%) 9.6 26.2 33.1 -40.2 -34.5 -32.3 -31.2 -28.7 Sudan GDP at market prices (% annual growth)b 5.5 3.5 -3.3 -10.1 4.0 3.2 3.0 3.0 Current account bal/GDP (%) -7.8 -2.5 -1.9 -11.5 -15.6 -17.3 -15.5 -14.3 Swaziland GDP at market prices (% annual growth)b 2.9 1.9 0.3 -1.5 1.5 1.6 1.8 2.0 Current account bal/GDP (%) -2.6 -9.7 -8.3 4.5 11.7 8.4 4.9 -16.2 Tanzania GDP at market prices (% annual growth)b 6.2 7.0 6.4 6.9 7.0 7.2 7.2 7.1 Current account bal/GDP (%) -4.7 -8.6 -16.7 -12.9 -15.8 -16.0 -15.6 -15.3 Togo GDP at market prices (% annual growth)b 1.6 4.2 4.9 5.7 4.0 3.7 3.5 3.4 Current account bal/GDP (%) -9.2 -6.4 -4.2 -6.5 -9.0 -11.3 -13.8 -16.1 Uganda GDP at market prices (% annual growth)b 6.9 6.2 5.0 4.7 6.5 7.0 6.8 6.8 Current account bal/GDP (%) -3.8 -8.1 -9.8 -3.0 -3.5 -3.5 -2.1 -2.8 Zambia GDP at market prices (% annual growth)b 4.8 7.6 6.8 7.2 6.4 7.0 6.8 6.5 Current account bal/GDP (%) -7.4 7.4 3.6 0.0 0.4 -0.1 -0.6 -1.1 Zimbabwe GDP at market prices (% annual growth)b -5.8 9.6 10.6 4.4 2.9 2.0 1.0 0.6 Current account bal/GDP (%) -12.2 -10.3 -25.0 -18.5 -20.0 -16.3 -13.6 -18.0 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f c Recently transitioned to high-income countries Equatorial Guinea GDP at market prices (% annual growth)b 15.0 -1.7 4.9 2.5 -4.9 -4.3 -2.0 -0.1 Current account bal/GDP (%) 11.2 -24.7 -14.6 -13.5 -10.7 -4.1 0.5 4.2 Source: World Bank. World Bank forecasts are frequently updated based on new information and changing (global) circumstances. Consequently, projections presented here may differ from those contained in other Bank documents, even if basic assessments of countries’ prospects do not significantly differ at any given moment in time. Liberia, Somalia, Sao Tome and Principe are not forecast owing to data limitations. a. GDP growth rates over intervals are compound average; current account balance shares are simple averages over the period. b. GDP measured in constant 2010 U.S. dollars. c. The recently high-income countries are based on World Bank's reclassification from 2004 to 2014. 85 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Special Topic Main messages Recent developments Two episodes of global financial turbulence over the past Inflation 13 months saw capital flows decelerate and a number of developing-country currencies depreciate. In parallel, Average inflation rates in developing and high-income developing-country inflation remained elevated, on countries have recently followed different patterns, average, increasing to 7.4 percent in 2013, up from 6.4 trending downwards since end 2012 in high income percent in 2012 and an average of 6 percent over the last countries, while stabilizing or increasing further in decade. developing countries (see figure S1.1). The persistence of high inflation in an environment Inflationary pressures in several developing countries characterized by stable or even declining commodity persisted throughout 2013 and at the start of 2014 prices reflects a variety of influences, including supply despite declining commodity prices, which would side bottlenecks, country-specific developments and, in normally be associated with a sharper deceleration in the most recent period, adjustments to past exchange rate consumer price inflation in developing countries (where depreciations. food and energy represents a larger share of households’ spending than in high income countries). This suggests This special topic analyzes the link between currency and that other factors had counterbalancing effects, including inflation patterns across developing economies, based on growing external price pressures linked to past currency estimates of the size and timing of the exchange rate pass depreciations. -through in 45 middle and low income countries. It breaks out the relative contribution of exchange rate Above average or rising inflation since early 2013 was movements and domestic cyclical conditions to recent mostly observed among large middle-income economies, inflation trends and presents inflation projections for whereas in other developing countries inflation eased 2014 and 2015. significantly, following more closely trends in commodity prices (see figure S1.1 and figure S1.2). The downward The analysis concludes that currency-related price trend was reinforced among low income countries by a pressures are mainly concentrated in a few large middle stabilization of local food prices after the 2011 droughts, income economies, including Argentina, Venezuela, policy tightening, and the easing of fuel and food supply Turkey, Ghana, South Africa, Indonesia or India. Higher disruptions during political turmoil in the Middle East inflation in these economies is influencing regional and parts of Sub-Saharan Africa. Currently, average aggregates, whereas markedly different patterns are inflation in low-income countries is just over 6 percent, observed in other countries. Reflecting the recent stabilization of foreign exchange markets, the inflationary impact of past depreciations is Figure S1.1 Inflation decoupling between developing and high-income countries expected in most cases to peak around mid-2014, implying that developing-country inflation could be percentage change, year-on-year expected to moderate later this year and throughout 14 2015—barring further episodes of exchange rate 13 Developing countries volatility. 12 11 High-income countries 10 Developing median 9 From a policy perspective, a low exchange rate pass- 8 through helps to limit the impact of currency fluctuations 7 6 on domestic demand and allows exchange rate 5 adjustments to play a greater role in absorbing external 4 3 shocks without undermining price or output stability. 2 Evidence of lower pass-through rates among developing 1 0 countries with inflation targeting central banks suggests -1 the importance of credibly anchoring inflation 2000 2002 2004 2006 2008 2010 2012 2014 expectations. Source: Haver, World Bank. 89 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Special Topic somewhat higher than during the early 2000s but below post-crisis averages. Figure S1.2 Upward drift mainly a middle income phenomenon By contrast, inflation has picked up since January 2013 in CPI change, year-on-year 14 a third of middle-income countries (and mainly large Low income Middle income 13 ones), despite the fall in global food prices and broadly 12 stable energy prices. Persistently high or rising inflation in some of these countries resulted from excess demand 11 pressures in recent years (due to easy policies and strong 10 credit growth), country specific price shocks, and in 9 many instances exchange rate depreciations. 8 7 Exceptionally large swings in inflation in few countries 6 also influenced region-wide aggregates, notably 5 Venezuela and Argentina in Latin America, Iran and 4 Syria in the Middle East, or Belarus in Eastern Europe 10M01 10M07 11M01 11M07 12M01 12M07 13M01 13M07 14M01 and Central Asia. Source: Haver, World Bank. Exchange rate developments Figure S1.3 Distribution of currency changes across developing countries since January 2012 Recent inflationary pressures are largely mirroring previous currency depreciations, which affected to Density Effective exchange rate varying degrees more than 60 percent of developing 0.04 Bilateral USD (inverted) countries since the start of 2012 (in both US dollar and Depreciation Appreciation nominal effective exchange rate terms, figure S1.3). 0.03 Significant depreciations sometimes pre-dated the Summer 2013 turmoil, such as in the case of Malawi, 0.02 Venezuela, Argentina, Ghana, Belarus or Iran, but were most pronounced after that among middle-income 0.01 countries with large current account deficits such as Turkey, South Africa, Indonesia, India and Brazil (figure S1.4). 0 -40 -30 -20 -10 0 10 20 30 40 Percent change Subsequent current account adjustments, notably in India Source: Haver, World Bank. and Indonesia, and reductions in domestic vulnerabilities meant that most of the countries hardest hit in the Summer of 2013 were less affected during the second Figure S1.4 Countries having seen the largest currency depreciations since 2012 episode of financial market unrest in January/February 2014. Currencies that depreciated most since the start of Nominal effective exchange rate Percentage change since January 2012 CRI 2014 were those of Argentina, Ghana, Ukraine, ZMB BDI Kazakhstan, Costa Rica or Zambia, typically as a result of NIC TUN negative country-specific news. Since end-February, From Jan 12 to Apr 13 MDA foreign exchange markets have stabilized and capital From May 13 to Dec 13 BRA EGY From Jan 14 to May 14 flows have recovered, but a large number of developing IND TUR countries are still adjusting to past depreciations, which IDN remain in excess of 10 percent since early 2012 in more UKR LSO than 20 countries. GMB ZAF VEN The next section provides a formal analysis of exchange GHA ARG rate pass-through effects and presents both counter- MWI factual and forward looking simulations. -70 -60 -50 -40 -30 -20 -10 0 10 Source: Haver, World Bank. 90 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Special Topic Exchange rate pass-through Our modelling approach also focuses on the relationship between aggregate consumer price inflation, exchange and inflation rate developments and the level of economic slack in an open economy Phillips Curve framework (see Technical Note for details and main estimation results). Figure S1.5 and S1.6 shows the estimated pass-through rates over Understanding the impact of exchange rate time and across the 45 developing countries included in developments on future inflation trends is critical to our sample.1 policy makers, particularly for central bankers who have to weigh conflicting objectives and varying time lags It shows that the effect of currency fluctuations on annual when seeking to limit price, currency and output consumer price inflation generally peaks after 10 to 11 volatility. The section provides a formal investigation of months. On average, the peak pass-through rate is about the exchange-rate pass-through (ERPT) to consumer 0.3, implying that a permanent 10 percent depreciation in price inflation in developing countries, presenting key the effective exchange rate adds around 3 percentage results and simulations. points to developing country inflation after a year, with the effect gradually dissipating afterwards. However, estimated A substantial empirical and theoretical literature has pass-through rates vary considerably across individual investigated the exchange rate pass-through in high countries, ranging from less than 0.1 to more than 0.5. income countries and increasingly in developing economies (Ca’ Zorzi, Hahn and Sanchez (2007), Frankel Confirming previous empirical findings (Gagnon and et al. (2005) or Mihaljek et al. (2000)). These studies Ihrig 2004, Reyes 2004, Schmidt-Hebbel and Tapia generally conclude that currency movements are only 2002), the analysis shows that inflation in developing partially transmitted to domestic prices, with the effect countries tends to be more sensitive to currency declining throughout the production chain (larger for fluctuations than in high income countries. import prices, then smaller for producer prices and more limited for consumer prices). They also provide evidence However, those developing countries with credible of considerable cross-country differences, with inflation inflation targeting central banks display significantly in emerging economies generally displaying greater lower pass-through rates (see figure S1.6), whereas sensitivity to exchange rate developments than in high- currency movements have the greatest impact on income countries (McCarthy (1999), Choudhri and consumer price inflation in countries where inflation and Hakura (2006) Reyes (2004), Schmidt-Hebbel and Tapia exchange rates are historically more volatile (figure S1.7). (2002)). Among other determinants, pass-through rates appear to be significantly influenced by policy choices, 1. Discussed results are based on the polynomial distributed lag variant including the credibility of central banks and other of the model (see annex for more details). institutional factors affecting inflation expectations and inertia (Taylor (2000)). To investigate the size and timing of such exchange rate Figure S1.5 Model-based pass-through rate: lag structure and dispersion of country estimates effect on future inflation, we estimate pass-through rates for over 45 developing countries (and 35 high income countries Pass-through rate estimated across 45 developing countries for comparison) using a single equation framework. The 0.5 1st Quartile model and main results are described below. Average 0.4 Median 3rd Quartile Model description and main results 0.3 While the literature on exchange rate pass-through is voluminous, there is no uniform definition of the term 0.2 “pass-through.” Much of the existing research focuses on the relationship between movements in nominal exchange 0.1 rates and import prices. A smaller but equally important strand of the literature concentrates on the exchange rate 0 lags , months pass-through to aggregate consumer price inflation 0 2 4 6 8 10 12 14 16 18 20 22 24 (Bachetta and van Wincoop (2003), Campa and Goldberg Source: World Bank. (2005), Gagnon and Ihrig (2004), Takhtamanova (2010)). 91 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Special Topic Figure S1.6 Pass-through rate higher in developing Figure S1.7 Correlation of pass-through rates with inflation/ countries, more limited for inflation targeters currency trends across developing countries Estimated pass-through rate after 12 months Correlation of individual country Currency pass-through rates with indicators depreciation rate 0.5 of the inflation / currency 3rd quartile 0.4 environment over the period 3rd quartile 2004 to 2013 0.3 0.4 3rd quartile 0.2 median 0.3 0.1 median Median inflation 3rd quartile Inflation volatility 0.0 rate median 0.2 1st quartile 1st quartile 0.1 median 1st quartile 0 Exchange rate Developing Dev. no-peg Dev. inflation target High income volatility Source: World Bank. Source: World Bank. These findings confirm that monetary policy, price and depreciations in Indonesia and to a lesser extent Thailand exchange rate stability are tightly connected and affect broadly cancel out the effect at region-wide level. one another through a complex web of causal relationships (Mishkin 2008). In so far as inflation Looking into individual country results, considerable targeting regimes serve successfully the anchoring of variations are reported. These reflect diverging exchange inflation expectations, they will (and arguably have) rate developments, but also different pass-through rates reduce(d) the inflationary impact of currency and levels of inflation inertia. In our sample, the ten fluctuations. Countries that have established such countries facing the most intense currency related price credibility can more easily tolerate exchange rate pressures are at present Venezuela, Argentina, Malawi, adjustments as a way of absorbing external shocks and Turkey, Moldova, Ghana, South Africa, Pakistan, regain autonomy in monetary policy decisions. Indonesia, Gambia and India (see figure S1.9). In those countries, current pressures can generally be traced back Impact of currency fluctuations: to post-May 2013 developments, although prior depreciations continued to play a dominant role in counter-factual simulations Venezuela or Malawi. Using the individual pass-through equations presented in In general, currency related price pressures appear to be the Technical Note, the impact of recent exchange rate more widespread among large middle income countries developments on inflation can be investigated. Figures with relatively flexible exchange rate regimes, deeper S1.8 and S1.9 summarizes counter-factual simulations, financial markets and relatively open capital accounts. reporting the deviation between actual inflation and what This group includes most notably Turkey, South Africa, would have occurred (according to model suggestions) if Indonesia, India or Turkey (see Eichengreen and Gupta, nominal effective exchange rates had remained constant 2014; World Bank, 2014 for discussions of the causal and since January 2012. empirical linkages), which experienced significant capital inflows in the post crisis period and had seen most These simulations suggest that past depreciations in a significant currency pressures when global interest rates number of large middle income economies are currently suddenly rose after May 2013. However, loose policies contributing to rising price pressures in most regions, and supply bottlenecks were already contributing to adding at present between 1 and 4 percentage points to rising domestic price pressures and deteriorating current aggregate inflation in all regions but the Middle East and account deficits in some of these countries before East Asia. In East Asia, a significant appreciation of the currency pressures intensified 2013, blurring the direction Renminbi in recent years continues to exert downward of causality between exchange rate and inflationary pressures on inflation in China, while currency pressures. 92 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Special Topic The likely impact of exchange rate fluctuations on subsequent inflation patterns is the focus of this analysis Figure S1.8 Estimated effect of currency developments on regional inflation but is only one among several important drivers of diverging inflation trends across developing countries at Estimated contribution of effective exchange rate trends since Jan 2012 to annual CPI inflation rates across developing regions, percent present. Other factors that are unaccounted for in this 5 analysis include developments in domestic food and 4 Developing ex. China China East Asia ex. China East Europe & C. Asia energy prices, taxes and subsidies, wage and monetary Latin America & Carib. South Asia 3 Sub-Sahara Africa Middle East policy. Nevertheless, exchange rate developments are estimated to account for no less than 50 percent of the 2 actual dispersion of inflation trends across developing 1 countries in 2013 (figure S1.10)- suggesting that 0 adjustments to past currency developments are at present one the key factors driving inflation patterns at the -1 individual country level. -2 -3 Outlook for 2014 and 2015 12M01 12M04 12M07 12M10 13M01 13M04 13M07 13M10 14M01 14M04 Source: World Bank. The above pass-through models can also be used to project when the effect of recent exchange rate movements will wear off and give a sense as to what Figure S1.9 Exchange rate impact on current inflation (April 2014) across developing countries extent inflation can be expected to ease in line with weaker domestic demand and below potential output in Estimated contribution of past NEER changes to CPI inflation in April 2014 Actual inflation in April 2014 (6-month avg), percent most developing regions this year. 14 40 NEER from Jan 14 to Apr 14 12 NEER from May 13 to Dec 13 35 Looking at aggregate results for developing countries 10 NEER from Jan 12 to Apr 13 30 Total impact of NEER (excluding China), the impact of past depreciations is Actual inflation - RHS 8 25 expected to peak around mid-2014, and to gradually subside thereafter (figure S1.11). Interestingly, most of 6 20 the residual effect of past depreciations is still a legacy of 4 15 the May to December 2013 period, with currency 2 10 developments since the start of 2014 having, on average, 0 5 a much more limited impact thus far. Rising output gaps, -2 0 as many developing regions continue to register below -4 -5 potential growth, are estimated to cut aggregate inflation ZAF GMB PAK TUN ARG VEN TUR IDN EGY BRA PER ROM UKR CRI VCT ARM CIV NGA PRY CHN BOL GHA MDA IND LSO THA MEX PHL SLE GEO ECU LCA MWI DZA ZMB GUY HUN BDI DMA CMR UGA SLB MKD by around ½ of a percentage point in 2014 and 2015. Source: World Bank. In terms of annual average inflation, pressures resulting from past currency developments are still expected to Figure S1.10 Inflation change from 2012 to 2013: actual and model predictions build in 2014 in most regions (when compared with 2013, see figure S1.12). At the country level, the lagged 20 Model prediction based on effect of past currency depreciations / devaluations in effective exchange rate developpments countries like Malawi, Ghana, Turkey, Argentina or 15 Venezuela should still have a considerable effect by year end. However, in most cases, inflation should start 10 R² = 0.4914 edging lower in the second half of the year and moderate further in 2015. This should result from a combination of 5 declining external price pressures and a cooling off of Actual change in CPI inflation domestic demand in the face of tighter financing -4 -2 0 0 2 4 6 8 conditions. These projections are strongly conditioned by our assumption of constant effective exchange rates -5 throughout the projection period. -10 While current market conditions are stable and long term Source: World Bank. interest rates still at exceptionally low levels, the 93 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) GLOBAL ECONOMIC PROSPECTS | June 2014 Special Topic normalization of monetary policy in the US and eventually in other high income countries might exert Figure S1.11 Outlook for inflation in developing country (exc. China) and main contributing factors additional downward pressure on some developing country currencies within the projection horizon. Should CPI inflation and estimated contribution of NEER and output gap developments Developing countries exc. China such pressures materialize, inflation might not moderate as 9.5 Inflation (actual and projected) currently predicted, forcing central banks to accelerate their NEER from Jan 12 to Apr 13 NEER from May 13 to Dec 13 9 tightening cycle, particularly in those economies combining NEER from Jan 14 to May 14 above target inflation and large pass-through rates. 8.5 Output gap since Jan 12 8 During recent episode of financial market turmoil, currency pressures have had an important bearing on 7.5 monetary policy decisions, being more closely correlated 7 with interest rate decisions than actual changes in inflation (see figure S1.13). 6.5 6 At the same time, the credibility of the central bank plays 12M01 12M07 13M01 13M07 14M01 14M07 15M01 15M07 itself a considerably role in reducing the expected Source: World Bank. exchange rate pass-through, hence limiting risks to price stability resulting from significant currency fluctuations. In fact, when monetary authorities are known to act Figure S1.12 Currency-related pressures still building up in 2014 across most regions decisively to stabilize inflation or counteract imported price pressures, agents correctly understand the central Contribution of NEER and output gap developments to inflation in 2014 (compared with 2013) Percent bank’s intentions and are less likely to pass-through cost 4 Output gap increases, including those arising from exchange rate NEER from Jan 14 to May 14 depreciations (Gagnon and Ihrig 2004). 3 NEER from May 13 to Dec 13 NEER from Jan 12 to Apr 13 Total 2 The observed decline in the exchange rate pass-through among countries having adopted explicit inflation targets 1 (Mishkin and Schmidt-Hebbel 2007, Coulibaly and 0 Kempf 2010, World Bank 2013) reflects such a tendency towards greater credibility in monetary policy, breaking -1 the old tendency for prices and wages to be indexed to past inflation and currency depreciations. In such case, -2 East Eur. & Asia & Pac. Latin Am. & Dev. Excl. Sub-Sah. Developing South Asia Mid. East & East Asia & exchange rate fluctuations can help mitigate external C. Asia ex. China Carib. China Africa countries N. Africa Pac. shocks and smooth macroeconomic adjustments when Source: World Bank. combined with prudent fiscal policy, stable financial systems and credible reforms. Figure S1.13 Monetary policy, inflation and recent currency trends across developing countries NEER depreciation since Jan 13 20 Percent Change in inflation rate since Jan 13 15 10 R² = 0.2155 5 R² = 0.1117 0 -5 -10 -5 -4 -3 -2 -1 0 1 2 3 4 Change in short-term interest rate since Jan 2013 Source: World Bank. 94 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) TECHNICAL NOTE Pass-through equation and main estimation results A hybrid Philips Curve was used to estimate the pass-through rate across 35 high income and 45 developing countries. The single equation model is defined such that actual inflation Πt is a function of the output gap (yt) and expected future inflation, estimated as a combination of inflation inertia (i.e. ø. Πt-1), the expected exchange rate pass -through (α.∆e) and an auto- regressive error term (δ.εt-1). The model is estimated over the period 2002m1 to 2014m2 at a monthly frequency for each individual country using Nonlinear Least Squares. Inflation is measured as annual changes in the overall consumer price index for each individual countries, output gap esti- mates are those of the World Bank derived by using a Cobb Douglas production function approach (see Burns, Bui, Dzybak and van Rensburg, 2014), while exchange rates are measured in nominal effective (trade -weighted) terms and calculated by the IMF and World Bank. The estimated lag structure of the exchange rate pass -through is defined following two alternative approaches. The first one consists of defining the optimal lag structure for each country using the Akaike information criteria. The second one consists of estimating a full 12 lag structure for each country, reducing the number of estimated coefficients by fitting a 3rd order lag polynomial function. Both approaches show that the immediate exchange rate pass -through coefficients (αk) are relatively small, with their effect generally peaking after 3 to 4 months. However, the final pass -through rates are both larger and longer lasting when ac- counting for second round effects relating to inflation inertia and the usual propagation of price shocks (captured in the mod- el by the lagged dependent variable and autoregressive errors). Table S1.1 and S1.2 show the main regression results for high income and developing countries, based on the polynomial distributed lag variant of the model. Table S1.1 Main regression results for high income countries Cum ulative Output Inflation Durbin- t-stat t-stat t-stat R2 pass-through gap inertia Watson AUT -0.01 -0.2 0.01 0.3 0.91 20.3 0.9 2.0 CHE -0.02 -2.5 0.01 0.3 0.86 16.8 0.9 2.0 KWT -0.06 -2.8 0.01 1.1 0.97 35.4 0.9 2.0 SAU -0.02 -1.5 0.02 0.8 0.97 47.2 1.0 2.2 DNK -0.01 -0.9 0.02 1.3 0.90 21.0 0.9 2.1 LUX -0.04 -1.3 0.02 1.3 0.86 16.0 0.8 2.0 NLD -0.01 -1.0 0.02 1.7 0.88 22.4 0.9 2.0 DEU -0.01 -0.5 0.02 1.0 0.87 13.3 0.8 2.0 FRA 0.01 0.4 0.03 1.0 0.88 15.9 0.9 2.0 RUS 0.00 -0.2 0.03 1.6 0.95 40.5 1.0 2.0 HKG -0.01 -0.2 0.03 1.3 0.95 34.8 0.9 2.0 TTO 0.01 0.1 0.03 1.4 0.90 22.2 0.9 1.9 ITA 0.00 -0.2 0.03 2.2 0.91 22.9 0.9 2.2 JPN -0.01 -1.9 0.04 1.4 0.81 10.8 0.9 2.0 FIN -0.05 -3.2 0.04 2.9 0.87 22.7 0.9 2.0 SGP -0.02 -0.6 0.05 3.1 0.93 32.8 0.9 2.0 NZL 0.00 -0.2 0.05 0.4 0.75 1.3 1.0 2.0 PRT -0.05 -1.4 0.06 1.9 0.92 26.1 0.9 2.0 ISL -0.08 -3.4 0.07 2.7 0.70 8.3 1.0 2.0 CZE -0.03 -1.8 0.07 3.1 0.85 16.7 0.9 2.1 BEL -0.02 -0.6 0.07 1.5 0.87 15.2 0.9 2.1 HRV -0.16 -2.5 0.08 3.0 0.80 11.9 0.9 1.9 TWN -0.01 -0.4 0.11 2.7 0.72 9.8 0.7 2.0 KOR -0.01 -1.1 0.12 2.0 0.85 14.1 0.9 1.9 POL -0.01 -1.6 0.12 2.8 0.82 12.8 0.9 2.1 CHL -0.03 -2.0 0.20 3.7 0.85 19.7 1.0 2.1 IRL -0.05 -0.7 0.42 3.5 0.43 4.7 1.0 2.0 95 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table S1.2 Main regression results for developing countries Cum ulative t-stat Output gap t-stat Inflation t-stat R2 Durbin- pass-through inertia Watson ARG -0.34 -5.4 0.00 0.0 0.35 3.2 1.0 2.1 ARM -0.12 -3.2 0.09 2.7 0.81 13.0 0.9 2.0 BDI -0.05 -1.4 0.01 0.1 0.92 24.7 0.9 2.0 BOL -0.09 -3.5 0.23 2.4 0.91 24.8 1.0 2.1 BRA -0.01 -2.1 0.02 0.7 0.94 25.7 1.0 2.1 CHN -0.08 -3.7 0.11 3.0 0.88 22.5 0.9 2.0 CIV -0.02 -0.4 0.02 0.5 0.86 15.4 0.8 2.0 CMR -0.02 -0.5 0.00 0.1 0.89 19.8 0.9 2.0 CRI -0.07 -2.7 0.06 1.7 0.88 19.6 1.0 2.1 DMA -0.09 -2.6 0.02 0.8 0.88 16.4 0.9 2.0 DZA -0.01 -0.1 0.06 0.8 0.82 12.2 0.8 2.0 ECU -0.03 -1.0 0.00 0.0 0.88 24.6 1.0 1.8 EGY -0.03 -1.1 0.17 1.2 0.88 13.4 1.0 2.1 GEO -0.12 -3.3 0.08 1.7 0.85 16.7 0.9 2.0 GHA -0.06 -1.2 0.02 0.5 0.85 13.4 0.9 2.0 GMB -0.03 -2.1 0.02 0.0 0.91 21.3 1.0 1.9 GUY -0.08 -1.6 0.02 0.3 0.87 16.3 0.8 2.0 HUN -0.04 -2.6 0.03 1.7 0.98 30.8 0.9 2.0 IDN -0.06 -2.5 0.01 0.1 0.87 18.5 0.9 2.0 IND -0.04 -1.6 0.10 1.8 0.88 18.4 0.9 1.9 LCA -0.18 -3.0 0.07 2.0 0.83 16.3 0.8 1.8 LSO -0.01 -1.6 0.04 0.7 0.94 35.7 1.0 2.1 MDA -0.08 -3.8 0.03 0.6 0.93 18.5 1.0 2.0 MEX -0.02 -1.6 0.03 1.1 0.76 6.4 0.9 1.7 MKD -0.12 -1.5 0.01 0.2 0.90 20.8 0.9 2.0 MWI -0.03 -2.3 0.03 0.9 0.95 40.0 1.0 2.1 NGA -0.12 -2.4 0.02 0.2 0.77 11.0 0.8 2.0 PAK -0.05 -1.0 0.04 0.8 0.91 20.6 1.0 2.1 PER -0.03 -1.0 0.09 2.6 0.82 14.0 0.9 2.1 PHL -0.04 -1.3 0.28 1.8 0.80 7.2 1.0 2.0 PRY -0.10 -2.7 0.16 1.7 0.81 12.0 0.9 2.0 ROM -0.02 -1.2 0.02 0.7 0.93 52.9 1.0 2.0 SLB -0.06 -1.7 0.06 1.5 0.89 18.1 0.9 2.0 SLE -0.07 -3.1 0.00 0.0 0.88 17.3 0.8 1.8 THA -0.06 -0.8 0.25 1.9 0.39 3.3 0.9 2.1 TUN 0.00 -0.1 0.01 0.3 0.89 17.5 0.9 2.0 TUR -0.09 -2.1 0.02 0.3 0.87 22.1 1.0 1.9 UGA -0.03 -0.8 0.07 0.4 0.89 18.1 1.0 2.1 UKR -0.13 -2.8 0.18 3.2 0.80 12.4 1.0 1.7 VCT -0.06 -2.9 0.01 0.4 0.92 25.6 0.9 2.0 VEN -0.02 -0.6 0.05 1.4 1.00 42.0 1.0 1.9 ZAF -0.04 -3.3 0.02 0.6 0.86 17.5 1.0 2.1 ZMB -0.01 -1.2 0.00 0.0 0.97 37.9 1.0 1.9 96 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) References Bacchetta, P. and Eric van Wincoop (2003). “Why do Consumer Prices React Less than Import Prices to Exchange Rates?”, Journal of European Economic Association, 1, 662-670 Bacchetta, P., and Eric van Wincoop (2005). 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Vigfusson, Robert, Nathan Sheets, and Joseph Gagnon (2008). "Exchange Rate Pass-through to Export Prices: Assessing Some Cross-Country Evidence," Review of International Economics. World Bank, (2013). "Latin America's Deceleration and the Exchange rate Buffer," WB Semiannual Report. World Bank, (2014). "Global Economic Prospects: ," Volume 8. January 2014. 98 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) 99 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.1 GDP growth (Constant 2010 U.S. Dollars) Annual estimates and forecastsa Quarterly growthb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 World 2.4 4.3 3.1 2.5 2.4 2.8 3.4 3.5 1.0 3.6 3.5 3.5 1.0 High Income Countries 1.4 3.0 1.9 1.5 1.3 1.9 2.4 2.5 -0.9 3.2 2.1 3.1 -0.4 Euro Area 1.0 1.9 1.6 -0.6 -0.4 1.1 1.8 1.9 -0.7 1.4 0.6 0.9 0.7 OECD Countries 1.3 2.9 1.8 1.4 1.3 2.0 2.4 2.4 -0.6 2.3 2.3 2.5 -0.3 Non-OECD Countries 4.0 5.7 4.9 3.4 2.5 2.4 2.9 3.4 0.9 3.5 3.2 4.3 .. Developing Countries 5.3 7.7 6.1 4.8 4.8 4.8 5.4 5.5 4.0 4.4 5.4 4.2 3.1 East Asia and the Pacific 8.0 9.6 8.3 7.4 7.2 7.1 7.1 7.0 5.9 6.9 8.6 6.8 5.0 Cambodia 7.4 6.0 7.1 7.3 7.4 7.2 7.0 7.0 .. .. .. .. .. China 9.4 10.4 9.3 7.7 7.7 7.6 7.5 7.4 6.6 7.4 9.3 7.2 5.8 Fiji 1.3 0.1 1.9 2.2 2.7 2.4 2.4 2.3 .. .. .. .. .. Indonesia 4.6 6.2 6.5 6.3 5.8 5.3 5.6 5.6 5.8 5.2 5.5 6.2 4.0 Lao People's Dem. Rep. 6.2 8.5 8.0 8.2 8.1 7.2 7.9 9.1 .. .. .. .. .. Malaysia 3.9 7.4 5.1 5.6 4.7 4.9 5.0 5.0 -1.2 6.8 7.1 7.6 3.3 Mongolia 5.8 6.4 17.5 12.4 11.7 10.0 8.8 7.4 23.5 20.6 -6.4 9.7 6.0 Myanmar 9.7 5.3 5.9 7.3 7.5 7.8 7.8 7.8 .. .. .. .. .. Papua New Guinea 3.0 8.0 9.0 8.7 4.4 10.0 20.0 4.0 .. .. .. .. .. Philippines 4.0 7.6 3.6 6.8 7.2 6.6 6.9 6.5 9.7 6.4 4.3 5.2 6.3 Solomon Islands 2.8 7.0 9.1 4.9 3.1 3.5 3.5 3.5 .. .. .. .. .. Thailand 3.5 7.8 0.1 6.5 2.9 2.5 4.5 4.5 -5.4 0.7 6.1 0.5 -8.2 Timor-Leste 3.3 9.5 12.0 8.3 8.1 8.0 7.7 8.6 .. .. .. .. .. Vanuatu 2.8 1.6 1.2 1.8 2.8 3.2 3.2 3.2 .. .. .. .. .. Viet Nam 5.9 6.4 6.2 5.3 5.4 5.5 5.6 5.8 .. .. .. .. .. Europe and Central Asia 4.0 5.9 6.2 1.9 3.6 2.4 3.7 4.0 5.2 5.4 3.3 3.6 .. Albania 4.9 3.8 3.1 1.3 0.4 2.1 3.3 3.5 .. .. .. .. .. Armenia 7.7 2.2 4.7 7.2 3.5 5.0 5.0 5.0 .. .. .. .. .. Azerbaijan 14.4 4.9 0.1 2.2 5.8 5.2 4.1 3.6 .. .. .. .. .. Belarus 6.6 7.7 5.5 1.7 0.9 -0.5 1.5 1.0 16.6 -7.4 -3.6 -5.3 .. Bosnia and Herzegovina 4.0 0.7 1.3 -1.1 1.8 2.0 3.5 3.5 .. .. .. .. .. Bulgaria 4.0 0.4 1.8 0.6 0.9 1.7 2.4 2.8 1.1 0.6 1.9 1.4 1.1 Georgia 5.6 6.3 7.2 6.2 3.2 5.0 5.5 6.0 6.4 5.6 3.1 16.2 .. Hungary 1.8 1.3 1.6 -1.7 1.1 2.4 2.5 2.5 3.2 1.2 4.5 2.7 4.5 Kazakhstan 7.5 7.3 7.5 5.0 6.0 5.1 5.9 6.0 1.4 9.8 10.1 5.2 .. Kosovo 5.8 3.9 5.0 2.7 3.0 4.0 4.2 4.2 .. .. .. .. .. Kyrgyz Republic 4.2 -0.5 6.0 -0.1 10.5 6.5 5.4 5.3 .. .. .. .. .. Macedonia, FYR 2.3 2.9 2.8 -0.4 3.1 3.0 3.5 3.7 .. .. .. .. .. Moldova 4.9 7.1 6.8 -0.7 8.9 3.0 3.8 4.5 .. .. .. .. .. Montenegro .. 2.5 3.2 -2.5 3.5 3.2 3.5 3.3 .. .. .. .. .. Romania 4.4 -0.9 2.3 0.4 3.5 2.8 3.2 2.9 5.4 3.0 6.5 5.5 0.2 Serbia 3.6 1.0 1.6 -1.5 2.5 1.0 1.5 2.5 .. .. .. .. .. Tajikistan 7.7 6.5 7.4 7.5 7.4 6.3 6.2 5.8 .. .. .. .. .. Turkey 3.0 9.2 8.8 2.1 4.0 2.4 3.5 3.9 5.9 8.2 3.1 2.1 .. Turkmenistan 12.6 9.2 14.7 11.1 10.1 10.0 10.0 10.1 .. .. .. .. .. Ukraine 3.9 4.1 5.2 0.3 0.0 -5.0 2.5 4.0 3.6 0.5 -5.0 14.9 -12.5 Uzbekistan 6.1 8.5 8.3 8.2 8.0 7.0 6.7 6.7 .. .. .. .. .. Latin America and the Caribbean 2.9 5.9 4.1 2.6 2.4 1.9 2.9 3.5 1.8 1.3 2.4 1.4 0.9 Argentinae 2.9 9.1 8.6 0.9 3.0 0.0 1.5 2.8 8.5 9.0 -0.7 .. .. Belize 3.7 3.9 2.3 5.3 0.7 2.5 3.7 4.1 .. .. .. .. .. Bolivia 3.4 4.1 5.2 5.2 6.5 5.2 4.3 3.9 5.7 4.6 7.4 9.4 .. Brazil 2.9 7.5 2.7 0.9 2.3 1.5 2.7 3.1 1.5 6.6 -1.2 1.8 0.7 Colombia 3.7 4.0 6.6 4.1 4.3 4.6 4.5 4.4 4.7 8.5 3.2 3.3 .. Costa Rica 3.8 5.0 4.4 5.1 3.5 3.7 4.3 4.6 -3.7 9.5 7.8 3.7 .. Dominica 3.1 1.0 -0.3 -1.7 0.8 1.7 2.6 2.9 .. .. .. .. .. Dominican Republic 4.5 7.8 4.5 3.9 4.1 4.0 4.2 4.5 -13.0 15.2 14.5 15.0 .. Ecuador 3.8 3.5 7.8 5.1 4.5 4.3 4.2 5.1 3.8 6.8 7.1 4.7 .. El Salvadore 1.7 1.4 2.2 1.9 1.7 2.1 2.6 2.8 .. .. .. .. .. Guatemala 3.0 2.9 4.2 3.0 3.7 3.4 3.5 3.6 3.7 7.4 1.0 0.5 .. Guyana 1.0 4.4 5.4 4.8 4.9 4.4 3.5 3.6 .. .. .. .. .. Haiti 0.6 -5.4 5.6 2.8 4.3 3.6 3.2 3.0 .. .. .. .. .. Honduras 3.7 3.7 3.8 3.9 2.6 3.0 3.5 4.0 .. .. .. .. .. Jamaica 0.7 -1.5 1.7 -0.5 0.2 1.1 1.3 1.7 .. .. .. .. .. Mexico 1.3 5.1 4.0 4.0 1.1 2.3 3.5 4.0 1.0 -2.9 3.9 0.5 1.1 Nicaraguae 2.5 3.3 5.7 5.0 4.6 4.5 4.4 4.4 .. .. .. .. .. Panama 5.6 7.5 10.8 10.7 8.0 6.8 6.2 6.4 .. .. .. .. .. Paraguay 2.2 13.1 4.3 -1.2 13.9 4.8 4.3 4.0 57.0 0.4 5.7 -5.7 .. Perue 4.6 8.5 6.5 6.0 5.8 4.0 5.6 6.0 5.2 8.7 5.5 7.9 -2.2 St. Lucia 2.2 0.4 1.3 0.5 -0.9 0.9 2.2 2.8 .. .. .. .. .. St. Vincent and the Grenadines 3.2 -2.8 0.1 2.3 2.1 1.7 2.8 3.9 .. .. .. .. .. Venezuela, Bolivarian Rep. of 3.3 -1.5 4.2 5.6 1.3 0.0 1.0 1.9 .. .. .. .. .. 100 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Annual estimates and forecastsa Quarterly growthb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 Middle East and North Africa 4.4 4.7 -0.8 0.6 -0.1 1.9 3.6 3.5 0.4 3.5 1.7 4.0 .. Algeria 3.6 3.6 2.6 3.3 2.7 3.3 3.5 3.6 .. .. .. .. .. Djibouti 3.5 3.5 4.5 4.8 5.0 6.0 6.5 6.5 .. .. .. .. .. Egyptd 4.3 5.1 1.8 2.2 2.1 2.4 2.9 3.2 1.4 -0.3 1.1 3.2 .. Iran, Islamic Rep. of 4.6 5.9 2.7 -5.6 -1.7 1.5 2.0 2.3 .. .. .. .. .. Iraq -1.0 5.9 10.2 10.3 4.2 5.9 6.7 8.2 .. .. .. .. .. Jordan 6.1 2.3 2.6 2.7 2.8 3.1 3.5 4.0 3.6 3.7 1.7 2.4 .. Lebanon 4.4 7.0 3.0 1.4 0.9 1.5 2.5 3.0 .. .. .. .. .. Libya 3.8 5.0 -62.1 104.5 -9.4 -9.7 28.8 9.0 .. .. .. .. .. Morocco 4.6 3.6 5.0 2.7 4.4 3.0 4.4 4.5 -2.3 12.3 1.9 6.5 -9.4 Syrian Arab Republic 4.6 3.2 -3.4 -21.8 -22.5 -8.6 -6.2 1.7 .. .. .. .. .. Tunisia 4.2 3.0 -2.0 3.6 2.6 2.7 3.5 4.0 1.8 3.3 2.2 3.7 .. West Bank and Gaza 2.4 9.2 12.2 5.9 1.5 2.5 2.7 2.9 .. .. .. .. .. Yemen 3.5 7.7 -12.6 2.4 4.0 5.9 4.2 3.8 .. .. .. .. .. South Asia 5.8 9.7 7.3 5.0 4.7 5.3 5.9 6.3 .. .. .. .. .. Afghanistan 11.9 8.4 6.1 14.4 3.6 3.2 4.2 4.6 .. .. .. .. .. Bangladeshd 5.2 6.1 6.7 6.2 6.0 5.4 5.9 6.2 .. .. .. .. .. Bhutan 8.2 11.7 8.6 4.6 6.5 7.2 7.8 8.0 .. .. .. .. .. Indiad 7.3 8.9 6.7 4.5 4.7 5.5 6.3 6.6 4.4 4.4 6.2 3.3 4.4 Maldives 6.3 7.1 6.5 3.4 3.7 4.5 4.2 4.1 .. .. .. .. .. Nepald 3.4 4.8 3.4 4.9 3.6 4.5 4.3 4.3 .. .. .. .. .. Pakistand 4.9 2.6 3.6 3.8 3.7 3.7 3.9 4.0 .. .. .. .. .. Sri Lanka 4.4 8.0 8.2 6.3 7.3 7.2 6.9 6.7 5.4 6.9 8.8 11.4 .. Sub-Saharan Africa 4.5 5.2 4.5 3.7 4.7 4.7 5.1 5.1 1.3 5.8 -1.8 4.1 -0.4 Angola 10.9 3.4 3.9 6.8 4.1 5.2 6.5 6.8 .. .. .. .. .. Benin 3.6 2.6 3.5 5.4 4.0 4.5 4.4 4.3 .. .. .. .. .. Botswana 3.0 8.6 6.1 4.2 4.2 4.1 4.1 4.0 5.2 8.4 -1.4 6.5 .. Burkina Faso 5.2 7.9 4.2 9.5 6.6 6.7 6.5 6.3 .. .. .. .. .. Burundi 2.9 3.8 4.2 4.0 4.5 4.0 3.7 3.0 .. .. .. .. .. Cameroon 2.9 3.3 4.1 4.6 4.7 4.9 5.1 5.0 .. .. .. .. .. Cabo Verde 6.0 3.7 4.5 2.5 1.7 2.5 2.2 4.0 .. .. .. .. .. Central African Republic 0.7 3.3 3.1 4.1 -18.0 -1.8 1.1 2.5 .. .. .. .. .. Chad 9.3 13.6 2.4 4.6 3.6 8.5 7.7 6.4 .. .. .. .. .. Comoros 1.8 2.1 2.2 3.0 3.3 3.5 3.5 3.2 .. .. .. .. .. Congo, Democratic Rep. 4.2 7.2 6.9 7.2 6.5 6.0 5.0 4.4 .. .. .. .. .. Congo, Rep. 3.8 8.8 3.4 3.8 3.5 5.9 7.4 4.9 .. .. .. .. .. Cote d'Ivoire 0.8 2.4 -4.7 9.5 8.7 7.4 5.9 4.0 .. .. .. .. .. Eritrea 0.7 2.2 8.7 7.0 3.6 3.5 3.0 2.0 .. .. .. .. .. Ethiopia 7.6 12.6 11.2 8.7 9.7 7.4 7.0 6.6 .. .. .. .. .. Gabon 1.3 6.7 7.1 5.6 3.5 3.6 3.7 3.7 .. .. .. .. .. Gambia 3.2 6.5 -4.3 5.3 6.2 6.5 6.0 5.0 .. .. .. .. .. Ghana 5.0 8.0 15.0 7.9 7.1 5.0 7.3 7.5 .. .. .. .. .. Guinea 2.4 1.9 3.9 3.9 2.6 4.6 5.2 5.5 .. .. .. .. .. Guinea-Bissau 2.3 1.7 4.8 -6.7 0.3 2.5 2.7 2.7 .. .. .. .. .. Kenya 3.6 5.8 4.4 4.6 4.7 5.0 4.7 4.0 .. .. .. .. .. Lesotho 3.3 7.9 3.7 4.0 4.1 4.2 4.4 4.1 .. .. .. .. .. Madagascar 2.5 0.5 1.9 3.1 2.8 4.0 4.5 4.5 .. .. .. .. .. Malawi 3.8 -9.5 4.3 1.9 4.2 4.4 4.6 4.7 .. .. .. .. .. Mali 5.4 5.8 2.7 -0.4 1.8 6.6 5.8 5.7 .. .. .. .. .. Mauritania 4.5 5.1 4.0 7.6 5.7 4.4 3.7 3.1 .. .. .. .. .. Mauritius 3.4 4.1 3.9 3.2 3.2 3.7 4.1 4.2 .. .. .. .. .. Mozambique 7.1 7.1 7.3 7.4 7.1 8.1 8.6 8.4 .. .. .. .. .. Namibia 3.9 6.3 5.7 5.0 4.2 3.4 3.5 3.3 .. .. .. .. .. Niger 3.7 8.4 2.3 10.8 3.6 6.2 6.0 5.6 .. .. .. .. .. Nigeria 5.7 7.8 6.8 6.5 7.0 6.7 6.5 6.1 .. .. .. .. .. Rwanda 7.2 7.2 8.2 8.0 5.0 7.2 7.4 7.4 .. .. .. .. .. Senegal 3.7 4.3 2.1 3.5 3.7 4.1 4.3 4.2 .. .. .. .. .. Seychelles 1.4 5.9 7.9 2.8 3.7 3.7 2.9 2.8 .. .. .. .. .. Sierra Leone 5.9 5.4 6.0 15.2 13.3 14.1 10.5 9.2 .. .. .. .. .. South Africa 3.2 3.1 3.5 2.5 1.9 2.0 3.0 3.5 0.7 5.4 -1.9 3.7 -0.4 South Sudan 6.2 4.2 1.6 -42.1 27.0 8.0 8.5 9.0 .. .. .. .. .. Sudan 5.5 3.5 -3.3 -10.1 4.0 3.2 3.0 3.0 .. .. .. .. .. Swaziland 2.9 1.9 0.3 -1.5 1.5 1.6 1.8 2.0 .. .. .. .. .. Tanzania 6.2 7.0 6.4 6.9 7.0 7.2 7.2 7.1 .. .. .. .. .. Togo 1.6 4.2 4.9 5.7 4.0 3.7 3.5 3.4 .. .. .. .. .. Uganda 6.8 5.9 6.6 3.4 6.0 7.1 6.8 6.8 .. .. .. .. .. Zambia 4.8 7.6 6.8 7.2 6.4 7.0 6.8 6.5 .. .. .. .. .. Zimbabwe -5.8 9.6 10.6 4.4 2.9 2.0 1.0 0.6 .. .. .. .. .. a. Annual percentage change b. Quarter over quarter growth, seasonally adjusted and annualized c. Compound average of the period 2000-2009 d. Annual GDP is on fiscal year basis, as per reporting practice in the country e. Preliminary for long-term average. Data was recently rebased; missing data up to 2003 was spliced with the earlier series. Source: World Bank, WDI, Haver Analytics 101 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.2 Current account balance (Percentage share of nominal GDP) Annual estimates and forecastsa Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 World 0.0 0.4 0.3 0.3 0.3 0.4 0.4 0.4 .. 0.0 0.0 0.0 .. High Income Countries -0.4 0.3 0.5 0.6 0.9 0.9 0.9 1.0 1.1 1.5 0.8 1.3 .. Euro Area 0.2 0.6 0.7 1.9 2.9 3.1 3.3 3.3 1.9 3.1 2.9 4.0 .. OECD Countries -1.1 -0.5 -0.7 -0.5 0.0 0.1 0.2 0.5 -0.3 0.3 -0.3 .. .. Non-OECD Countries 9.2 8.2 10.4 9.8 7.9 8.5 7.5 7.3 7.0 5.1 6.2 6.3 .. Developing Countries 1.5 0.6 -0.1 -0.4 -0.8 -0.6 -0.6 -0.6 -0.8 -0.9 -0.7 -0.7 -0.5 East Asia and the Pacific 4.7 3.7 1.9 2.0 1.5 1.8 2.0 1.9 .. .. .. .. .. Cambodia -4.5 -6.9 -7.9 -10.1 -9.4 -9.7 -10.0 -10.3 .. .. .. .. .. China 5.2 4.0 1.9 2.6 2.0 2.2 2.3 2.3 2.5 2.4 1.8 1.7 .. Fiji -6.8 -4.0 -4.9 -1.0 -16.4 -6.3 -6.6 -6.9 .. .. .. .. .. Indonesia 2.2 0.7 0.2 -2.8 -3.3 -2.7 -2.1 -2.0 -2.7 -4.5 -3.9 -2.1 -2.1 Lao People's Dem. Rep. -2.3 -8.4 -10.3 -15.0 -20.8 -19.9 -18.2 -16.4 .. .. .. .. .. Malaysia 12.6 10.9 11.6 6.1 3.8 3.5 5.1 5.1 3.6 1.1 4.0 5.6 7.7 Mongolia -3.6 -14.3 -31.5 -32.8 -27.5 -16.5 -11.8 -10.4 .. .. .. .. .. Myanmar -0.7 -1.3 -2.6 -4.1 -4.4 -4.8 -5.1 -4.8 .. .. .. .. .. Papua New Guinea 3.2 -6.7 -1.4 -51.0 -27.0 -2.0 12.3 9.3 .. .. .. .. .. Philippines 1.2 4.5 2.5 2.8 3.5 2.0 2.2 2.4 2.5 3.1 2.8 5.4 .. Solomon Islands -14.8 -31.0 -14.4 -15.0 -12.0 -13.0 -12.4 -11.9 .. .. .. .. .. Thailand 3.3 3.1 1.2 -0.4 -0.7 1.3 1.0 1.0 0.5 -6.7 0.5 3.2 8.8 Timor-Leste 17.1 39.8 40.4 43.5 34.3 32.1 27.0 27.7 .. .. .. .. .. Vanuatu -3.1 -5.0 -7.3 -6.4 -4.4 -4.6 -4.9 -5.8 .. .. .. .. .. Viet Nam -10.0 -3.8 0.2 5.8 6.5 4.5 2.1 1.1 .. .. .. .. .. Europe and Central Asia -3.7 -3.2 -4.2 -3.7 -4.3 -3.3 -3.8 -3.9 -4.2 -5.2 -3.9 -5.7 .. Albania -8.5 -10.1 -13.3 -10.3 -10.6 -10.3 -12.4 -14.8 .. .. .. .. .. Armenia -8.8 -14.2 -11.4 -12.0 -10.5 -8.7 -7.7 -7.0 -13.0 -8.5 -3.5 -12.5 .. Azerbaijan 3.2 28.4 26.0 22.5 16.5 12.6 8.1 5.6 .. .. .. .. .. Bosnia and Herzegovina .. -5.6 -8.8 -9.6 -7.5 -6.6 -6.3 -6.1 .. .. .. .. .. Belarus -4.3 -15.0 -7.9 -2.9 -10.2 -8.4 -9.8 -7.6 -14.8 -4.7 -10.5 -11.0 .. Bulgaria -11.3 -1.5 0.1 -0.8 1.9 -0.5 -1.4 -1.6 -4.2 5.5 10.9 -4.2 -0.9 Georgia -11.2 -10.3 -12.5 -11.9 -5.9 -8.1 -7.8 -7.6 -5.4 -6.1 -2.5 -9.4 .. Hungary -6.8 0.2 0.4 0.4 2.8 2.5 2.0 1.8 3.1 2.5 4.8 1.7 .. Kazakhstan -2.0 1.0 5.4 -0.4 -0.1 1.0 1.5 1.6 3.6 0.0 -3.9 -0.1 .. Kosovo .. -12.0 -13.8 -7.6 -10.7 -8.7 -8.3 -8.6 .. .. .. .. .. Kyrgyz Republic -5.1 -6.4 -6.0 -15.0 -13.5 -15.7 -14.5 -12.6 .. .. .. .. .. Macedonia, FYR -6.0 -2.1 -2.5 -3.1 -1.9 -3.3 -4.1 -5.0 -6.1 -5.8 6.9 -2.9 .. Montenegro .. -22.9 -17.7 -18.7 -14.6 -16.9 -19.0 -20.0 .. .. .. .. .. Moldova -8.3 -7.7 -11.3 -6.8 -4.8 -6.7 -6.9 -7.1 .. .. .. .. .. Romania -8.0 -4.4 -4.6 -4.4 -1.1 -2.0 -1.8 -2.1 0.2 0.5 -1.9 -2.1 -0.9 Serbia .. -6.7 -9.1 -10.7 -5.0 -4.8 -4.6 -5.3 .. .. .. .. .. Tajikistan -4.8 -1.2 -4.7 -1.3 -2.7 -2.5 -2.0 -2.0 .. .. .. .. .. Turkey -3.2 -6.2 -9.7 -6.2 -7.9 -6.0 -6.2 -6.8 -7.8 -9.8 -6.1 -7.9 .. Turkmenistan .. -10.6 2.0 0.0 -3.4 -1.7 -1.5 -1.5 .. .. .. .. .. Ukraine 2.0 -2.6 -6.3 -8.1 -9.2 -4.6 -4.3 -3.9 -7.2 -5.1 -13.6 -10.8 .. Uzbekistan 5.2 6.2 6.2 5.8 1.2 2.1 1.8 0.7 .. .. .. .. .. Latin America and the Caribbean -0.4 -1.4 -1.4 -1.7 -2.5 -2.7 -2.7 -2.5 -1.9 -1.4 -1.4 -1.6 .. Argentinad 2.2 -0.2 -0.4 0.0 -0.7 -2.0 -2.2 -2.2 -2.0 0.7 -0.7 -1.1 .. Belize -13.0 -3.3 -1.3 -2.0 -3.6 -3.7 -3.5 -3.2 .. .. .. .. .. Bolivia 3.9 4.4 2.2 7.9 3.7 2.5 2.1 2.0 .. .. .. .. .. Brazil -0.7 -2.2 -2.1 -2.4 -3.6 -3.9 -3.8 -3.6 -4.2 -3.2 -3.2 -3.7 -4.9 Colombia -1.4 -3.1 -2.9 -3.2 -3.4 -3.6 -3.7 -3.6 -3.3 -2.7 -3.8 -3.6 .. Costa Rica -5.8 -3.5 -5.4 -5.3 -5.1 -5.2 -5.3 -5.3 -3.8 -4.7 -5.8 -6.0 .. Dominica -18.6 -17.3 -14.7 -11.5 -17.2 -18.4 -19.2 -18.7 .. .. .. .. .. Dominican Republic -3.1 -8.4 -7.9 -6.8 -4.2 -3.8 -3.4 -2.9 -2.1 -3.9 -7.2 -3.7 .. Ecuador 0.9 -2.4 -0.3 -0.2 -1.3 -1.5 -2.0 -1.0 -2.1 -3.0 -0.6 0.3 .. El Salvadore -4.2 -2.7 -4.9 -5.3 -6.5 -5.9 -5.7 -5.5 -5.9 -7.1 -7.6 -5.4 .. Guatemala -4.6 -1.5 -3.4 -2.6 -2.7 -2.6 -2.8 -2.8 -1.1 -2.9 -3.4 -3.4 .. Guyana -10.0 -6.9 -14.5 -14.1 -17.8 -20.7 -20.2 -19.3 .. .. .. .. .. Haiti 1.0 -2.5 -4.1 -3.7 -6.0 -5.8 -5.6 -5.4 .. .. .. .. .. Honduras -6.9 -4.3 -8.0 -8.6 -8.9 -7.5 -7.3 -7.0 .. .. .. .. .. Jamaica -10.2 -8.6 -13.3 -12.9 -10.0 -9.3 -8.0 -7.1 -9.9 -7.4 -11.8 -9.8 .. Mexico -1.5 -0.4 -1.1 -1.3 -2.1 -2.0 -2.2 -2.2 -2.3 -1.7 -1.8 -2.4 -1.5 Nicaraguad -13.1 9.6 12.8 12.7 11.4 -9.0 -7.8 -6.8 .. .. .. .. .. Panama -4.8 -11.6 -15.9 -10.5 -11.2 -10.7 -10.5 -9.0 .. .. .. .. .. Paraguay 1.7 -0.3 0.4 -0.9 2.1 1.8 0.9 0.1 1.9 6.2 4.8 -3.3 .. Perud -0.7 -2.4 -1.9 -3.3 -4.5 -5.7 -5.6 -5.1 -5.2 -4.8 -5.5 -2.1 .. St. Lucia -18.7 -16.8 -19.4 -14.9 -15.6 -15.0 -13.8 -12.9 .. .. .. .. .. St. Vincent and the Grenadines -18.8 -30.9 -28.9 -30.3 -30.0 -29.1 -28.5 -26.7 .. .. .. .. .. Venezuela, Bolivarian Rep. of 9.7 2.2 7.7 2.9 3.0 2.7 1.9 1.7 .. .. .. .. .. 102 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Annual estimates and forecastsa Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 Middle East and North Africa 5.2 1.6 2.7 -0.7 -3.4 -3.3 -3.6 -3.7 .. .. .. .. .. Algeria 22.4 7.5 9.7 6.4 1.4 0.7 -1.7 -3.4 .. .. .. .. .. Djibouti .. -5.4 -14.1 -12.3 -13.1 -15.2 -13.0 -12.8 .. .. .. .. .. Egypt 1.1 -2.0 -2.6 -3.4 -1.9 -0.9 -1.5 -2.0 -1.3 -2.6 1.0 -2.1 .. Iran, Islamic Rep. of 6.3 6.5 10.3 4.7 0.3 0.2 0.1 0.0 .. .. .. .. .. Iraq .. 3.0 12.0 6.7 0.0 1.0 1.2 1.4 .. .. .. .. .. Jordan -4.4 -7.1 -12.0 -18.4 -15.8 -13.7 -12.4 -11.3 -3.0 -7.7 -16.3 -11.7 .. Lebanon -16.6 -20.3 -12.1 -3.9 -6.3 -6.8 -7.0 -7.2 .. .. .. .. .. Libya .. 22.5 9.2 29.1 -5.5 -28.0 -19.4 -18.0 .. .. .. .. .. Morocco -0.1 -4.3 -8.1 -9.9 -8.7 -7.9 -6.8 -5.8 -7.9 -11.4 -6.5 -4.5 .. Syrian Arab Republic 2.8 -0.6 -16.0 -18.7 -22.0 -16.8 -12.5 -8.6 .. .. .. .. .. Tunisia -2.7 -4.7 -7.3 -8.1 -8.4 -7.5 -7.1 -6.3 -7.7 -10.1 -7.4 -8.8 .. West Bank and Gaza .. -24.3 -32.0 -36.4 -29.5 -30.4 -29.6 -29.4 .. .. .. .. .. Yemen 1.1 -3.7 -4.2 -0.9 -3.0 -3.4 -3.7 -4.2 .. .. .. .. .. South Asia -0.6 -2.7 -3.1 -4.1 -2.2 -2.0 -2.2 -2.5 -4.4 .. .. .. .. Afghanistan -0.3 2.8 3.1 3.9 3.6 3.0 -0.5 -2.0 .. .. .. .. .. Bangladesh 0.6 1.8 -0.1 1.9 2.1 0.9 0.6 0.3 .. .. .. .. .. Bhutan -0.1 -26.5 -25.3 -22.5 -22.2 -21.6 -20.7 -19.8 .. .. .. .. .. India -0.5 -3.3 -3.4 -5.0 -2.6 -2.2 -2.5 -2.9 -3.9 -5.0 -1.3 -0.9 -0.3 Maldives -1.1 -9.2 -19.1 -23.0 -20.5 -19.5 -19.0 -18.5 .. .. .. .. .. Nepal 0.6 -0.8 1.4 3.4 3.7 2.8 2.0 1.1 .. .. .. .. .. Pakistan -1.3 -0.7 -1.0 -1.0 -1.9 -1.8 -1.7 -1.5 .. .. .. .. .. Sri Lanka -3.4 -2.2 -7.8 -6.6 -3.9 -3.8 -3.5 -3.3 -6.6 -6.2 -2.5 -0.6 .. Sub-Saharan Africa -0.1 -1.0 -0.7 -2.7 -3.4 -3.6 -4.3 -4.4 .. .. .. .. .. Angola 5.0 9.1 12.6 11.5 8.6 8.8 5.8 3.8 .. .. .. .. .. Benin -7.0 -8.1 -7.1 -7.4 -5.4 -5.8 -5.7 -3.8 .. .. .. .. .. Botswana 8.0 -2.1 -2.1 -6.9 -1.4 -1.1 -0.9 -0.1 7.9 8.3 10.6 .. .. Burkina Faso -9.5 -2.0 -0.1 -1.1 -1.3 -2.4 -2.7 -2.0 .. .. .. .. .. Burundi -4.6 -14.8 -12.0 -10.3 -10.9 -9.7 -8.9 -7.9 .. .. .. .. .. Cote d'Ivoire 1.8 2.0 1.1 -1.8 -3.3 -4.3 -3.5 -2.9 .. .. .. .. .. Cameroon -2.4 -3.8 -3.0 -3.8 -3.6 -2.9 -2.3 -1.8 .. .. .. .. .. Cabo Verde -10.0 -13.4 -16.3 -11.5 -8.3 -5.2 -3.2 0.0 .. .. .. .. .. Central African Republic -8.6 -13.3 2.5 2.5 -1.1 -0.1 1.7 1.6 .. .. .. .. .. Chad -17.4 -32.2 -13.0 -19.5 -18.2 -10.2 1.9 1.9 .. .. .. .. .. Comoros -11.9 -27.2 -31.2 -16.8 -12.8 -12.3 -11.9 -10.9 .. .. .. .. .. Congo, Democratic Rep. 0.6 -16.5 -8.2 -9.9 -10.5 -10.6 -11.4 -11.6 .. .. .. .. .. Congo, Rep. -4.9 -34.4 25.7 -2.0 -0.1 0.5 1.5 0.6 .. .. .. .. .. Eritrea -20.9 -5.5 3.3 11.9 5.5 2.7 4.8 4.8 .. .. .. .. .. Ethiopia -5.1 -1.3 -1.9 -5.5 -6.1 -7.1 -7.0 -7.0 .. .. .. .. .. Gabon 14.9 5.8 11.3 14.0 7.4 6.6 3.6 3.5 .. .. .. .. .. Gambia -2.3 5.9 12.2 6.5 0.8 -1.4 -3.9 2.6 .. .. .. .. .. Ghana -13.8 -11.0 -10.9 -11.7 -13.4 -12.5 -10.5 -8.8 .. .. .. .. .. Guinea -6.9 -6.9 -22.9 -18.5 -20.3 -18.3 -22.5 -39.2 .. .. .. .. .. Guinea-Bissau 0.1 -8.5 -1.4 -5.0 -4.9 -4.8 -4.5 -3.3 .. .. .. .. .. Kenya -2.4 -7.4 -11.4 -10.4 -7.7 -8.1 -8.0 -8.2 .. .. .. .. .. Lesotho 4.8 -18.4 -18.2 -24.1 -12.1 -8.9 -6.7 -4.0 .. .. .. .. .. Madagascar -11.8 -7.9 -4.1 -3.9 -5.8 -9.2 -11.2 -7.5 .. .. .. .. .. Malawi -10.5 -14.6 -13.6 -19.0 -17.1 -16.7 -16.2 -14.5 .. .. .. .. .. Mali -8.1 -12.6 -6.1 -3.6 -8.6 -9.0 -9.0 -8.9 .. .. .. .. .. Mauritania -10.9 -5.9 -1.8 -25.3 -28.1 -27.9 -26.0 -25.5 .. .. .. .. .. Mauritius -2.7 -10.3 -13.4 -11.4 -10.2 -9.2 -8.4 -8.4 -7.7 -8.1 -12.9 -10.1 .. Mozambique -14.0 -15.6 -23.8 -43.5 -43.1 -41.1 -38.7 -36.8 .. .. .. .. .. Namibia 4.7 1.0 -1.2 0.6 -4.0 -2.6 -2.2 -0.4 .. .. .. .. .. Niger -9.6 -19.9 -26.7 -20.6 -20.8 -20.8 -20.3 -19.1 .. .. .. .. .. Nigeria 14.4 6.3 5.1 7.8 5.4 4.2 1.0 0.8 11.3 7.3 5.1 7.1 .. Rwanda -5.3 -7.4 -7.5 -11.6 -8.1 -6.7 -4.9 -3.2 .. .. .. .. .. Senegal -8.0 -4.6 -7.9 -10.0 -9.3 -8.3 -7.9 -7.2 .. .. .. .. .. Seychelles -15.4 -22.1 -26.5 -25.1 -17.8 -14.4 -13.1 -9.1 .. .. .. .. .. Sierra Leone -4.9 -22.7 -65.1 -28.5 -22.3 -13.7 -10.6 -9.4 .. .. .. .. .. South Africa -3.0 -1.9 -2.4 -5.2 -5.3 -5.9 -4.7 -5.0 -24.4 -23.6 -28.7 -16.6 .. South Sudan 9.6 26.2 33.1 -40.2 -34.5 -32.3 -31.2 -28.7 .. .. .. .. .. Sudan -7.8 -2.5 -1.9 -11.5 -15.6 -17.3 -15.5 -14.3 .. .. .. .. .. Swaziland -2.6 -9.7 -8.3 4.5 11.7 8.4 4.9 -16.2 .. .. .. .. .. Tanzania 6.2 7.0 6.4 6.9 7.0 7.2 7.2 7.1 .. .. .. .. .. Togo -9.2 -6.4 -4.2 -6.5 -9.0 -11.3 -13.8 -16.1 .. .. .. .. .. Uganda -3.8 -8.1 -9.8 -3.0 -3.5 -3.5 -2.1 -2.8 .. .. .. .. .. Zambia -7.4 7.4 3.6 0.0 0.4 -0.1 -0.6 -1.1 .. .. .. .. .. Zimbabwe -12.2 -10.3 -25.0 -18.5 -20.0 -16.3 -13.6 -18.0 .. .. .. .. .. Note: Quarterly CAB figures from the IFS may differ from the annual figures from the WDI a. Percentage of GDP in current USD b. Quarterly current account as a share of GDP in current USD c. Simple average of the period 2000-2009 d. Preliminary for long-term average. Data was recently rebased; missing data up to 2003 was spliced with the earlier series. Source: World Bank, WDI, IMF-IFS (BPM6 Definition) 103 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.3 Government consumption growth (Constant 2010 U.S. dollars) Annual Forecasta Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 World 2.6 1.9 0.7 1.5 1.4 2.1 2.3 2.2 11.7 -2.5 -2.0 8.6 .. High Income Countries 2.1 0.8 -0.8 0.1 0.2 1.0 1.2 1.1 7.1 -1.6 6.6 10.3 .. Euro Area 1.9 0.4 -0.4 -0.9 0.0 0.0 0.2 0.4 15.8 -4.4 8.6 7.4 .. OECD Countries 2.1 0.8 -0.9 0.1 -0.1 0.4 0.4 0.5 12.0 -1.1 2.4 8.5 .. Non-OECD Countries 2.6 0.6 1.9 2.0 6.2 6.1 6.0 5.8 -0.2 -4.8 7.5 14.8 .. Developing Countries 4.9 6.1 6.2 5.9 5.0 5.2 5.2 5.3 18.3 -3.7 -12.7 .. .. East Asia and the Pacific 7.4 9.6 8.8 8.4 7.5 7.4 7.4 7.5 5.7 18.3 -10.7 -12.1 .. China 7.7 11.0 9.6 9.1 7.8 7.9 7.9 8.0 .. .. .. .. .. Cambodia 10.3 12.5 7.8 6.7 7.0 7.0 7.0 7.0 .. .. .. .. .. Indonesia 8.0 0.3 3.2 1.3 4.9 4.4 4.9 4.6 22.7 -2.9 5.8 .. .. Lao People's Dem. Rep. 11.0 -4.2 11.8 26.6 7.0 7.0 7.0 7.2 .. .. .. .. .. Malaysia 7.4 3.4 15.8 5.1 6.3 4.7 4.5 4.5 -16.6 47.3 -24.0 5.3 .. Mongolia 1.7 13.4 12.4 9.4 8.7 8.0 7.0 7.0 .. .. .. .. .. Papua New Guinea 3.6 -2.6 12.0 8.0 8.6 7.0 6.0 4.0 .. .. .. .. .. Philippines 3.0 4.0 2.1 12.2 8.6 8.0 7.1 5.0 25.8 14.6 -32.0 -24.0 .. Solomon Islands 6.4 9.0 9.0 7.5 5.0 6.0 6.5 5.0 .. .. .. .. .. Thailand 4.5 6.4 1.1 7.5 4.9 3.5 3.7 4.3 -7.6 35.8 -8.1 -17.8 -15.9 Vanuatu 0.9 3.0 2.0 3.0 3.0 3.0 3.0 3.0 .. .. .. .. .. Viet Nam 6.7 12.3 6.9 7.4 7.5 7.1 7.5 6.5 .. .. .. .. .. Europe and Central Asia 3.0 0.4 2.9 4.3 2.9 4.3 4.7 3.7 20.9 -9.5 -6.3 .. .. Albania 6.0 -5.4 2.3 -8.2 8.6 8.5 2.8 3.2 .. .. .. .. .. Armenia 6.4 3.9 1.9 0.2 3.5 3.0 3.0 3.0 38.5 29.5 46.7 9.3 .. Azerbaijan 19.1 -9.8 10.2 2.2 9.0 2.2 3.0 3.0 17.0 36.9 1.9 0.4 .. Belarus 0.2 0.9 -1.5 -1.2 4.0 3.5 3.0 3.0 -21.5 19.9 31.4 17.7 .. Bulgaria 1.2 1.9 1.6 -1.4 2.5 2.6 1.7 2.1 52.3 1.3 13.3 -17.9 .. Georgia 12.5 -7.2 3.0 4.5 3.0 5.0 7.1 7.1 -4.0 3.3 .. .. .. Hungary 1.4 -2.1 -0.6 -2.3 0.3 1.0 1.2 1.2 2.9 2.7 -3.5 27.8 .. Kazakhstan 6.4 2.7 11.3 11.4 1.3 8.4 9.0 8.2 -22.9 -20.6 34.5 .. .. Kyrgyz Republic 0.8 -1.1 2.2 2.9 6.8 7.1 6.9 6.7 -33.6 23.1 -38.7 83.1 .. Macedonia, FYR 1.6 -2.0 -2.8 1.2 3.0 1.7 1.8 1.8 -4.1 -13.9 15.4 16.7 .. Moldova 7.2 -1.1 -1.0 8.9 5.5 5.1 3.0 3.5 -13.6 9.5 6.8 23.8 .. Romania -0.9 -13.6 0.3 2.3 1.0 1.2 1.3 1.4 41.0 -20.9 24.2 26.0 .. Turkey 3.5 2.0 4.7 6.1 5.9 6.0 6.3 4.0 34.1 -10.6 -24.5 .. .. Ukraine 1.9 4.0 -3.0 4.6 -1.0 -2.0 0.0 0.5 22.8 -19.9 -1.6 -24.7 .. Uzbekistan 6.2 6.2 3.1 8.0 9.3 5.9 5.9 5.9 .. .. .. .. .. Latin America and the Caribbean 2.9 4.2 3.0 4.1 2.7 2.6 2.3 2.6 12.8 0.9 -13.6 .. .. Argentina 2.9 7.2 8.8 6.5 7.4 0.2 1.0 2.0 .. .. .. .. .. Belize 4.9 1.0 -2.8 4.0 2.0 2.0 2.0 2.0 .. .. .. .. .. Bolivia 3.1 3.1 7.2 4.9 7.5 7.5 4.0 3.5 -1.0 16.7 .. .. .. Brazil 2.9 4.2 1.9 3.2 1.9 3.0 2.2 2.4 17.6 0.2 -13.6 .. .. Colombia 3.6 5.6 3.6 5.7 6.0 3.5 3.0 3.0 .. .. .. .. .. Costa Rica 2.3 4.7 1.5 1.7 3.9 4.0 3.0 3.0 .. .. .. .. .. Dominica 0.0 -1.9 6.1 1.2 2.0 2.1 2.4 2.5 .. .. .. .. .. Dominican Republic 4.1 3.3 0.4 11.5 -6.6 3.0 2.8 2.6 .. .. .. .. .. Ecuador 3.9 5.5 4.8 7.7 4.3 4.0 4.0 4.0 .. .. .. .. .. El Salvadore 1.5 2.2 3.9 2.5 6.0 2.0 2.2 2.5 .. .. .. .. .. Guatemala 3.7 7.8 5.5 6.8 4.8 3.2 4.5 2.0 .. .. .. .. .. Guyana 3.9 2.7 2.5 3.5 3.5 3.0 2.5 2.5 .. .. .. .. .. Haiti -0.8 -1.4 3.9 1.5 4.0 3.0 2.0 2.0 .. .. .. .. .. Honduras 5.6 -1.0 -1.0 1.3 2.5 2.3 2.0 3.0 .. .. .. .. .. Jamaica 0.1 0.3 -1.0 0.3 -2.0 0.8 1.2 2.5 .. .. .. .. .. Mexico 1.1 1.7 2.5 3.3 1.1 2.0 2.5 3.0 .. .. .. .. .. Nicaragua 2.0 4.7 12.3 8.0 1.8 3.0 5.0 6.0 .. .. .. .. .. Panama 3.9 38.3 4.2 -1.7 7.0 8.0 5.0 4.0 .. .. .. .. .. Paraguay 2.6 12.0 5.3 21.0 6.0 4.0 4.0 4.0 111.7 -37.8 -17.5 .. .. Peru 4.6 7.9 6.2 9.2 6.7 6.0 6.0 5.0 -57.9 27.7 -14.2 .. .. St. Lucia 2.7 7.2 4.9 2.0 2.0 1.5 1.7 2.0 .. .. .. .. .. St. Vincent and the Grenadines 1.9 7.0 -12.9 5.0 2.0 2.5 3.0 3.0 .. .. .. .. .. Venezuela, Bolivarian Rep. of 6.3 2.1 5.9 6.3 2.5 1.0 1.5 2.0 .. .. .. .. .. Middle East and North Africa 4.3 1.4 3.1 3.3 2.9 3.7 3.8 3.8 .. .. .. .. .. Algeria 11.3 7.7 6.0 6.5 6.0 5.6 5.6 5.6 .. .. .. .. .. Egypt 2.6 4.5 3.8 3.1 1.9 1.9 2.0 2.0 -27.9 12.1 .. .. .. Iran, Islamic Rep. of 2.7 -2.8 3.0 0.0 1.9 3.7 3.6 3.5 .. .. .. .. .. Jordan 5.4 -10.9 -6.5 1.0 3.0 3.0 3.0 3.0 .. .. .. .. .. Lebanon 3.0 6.4 3.0 10.9 4.9 4.7 4.6 4.9 .. .. .. .. .. Morocco 3.9 -0.9 4.6 4.4 4.3 4.5 4.5 4.5 .. .. .. .. .. Syrian Arab Republic 7.4 20.0 8.5 8.2 -8.0 -1.0 0.0 0.0 .. .. .. .. .. Tunisia 4.5 5.1 5.8 3.3 3.5 3.5 3.5 3.5 .. .. .. .. .. Yemen 4.3 -14.1 -24.0 4.9 7.7 6.0 6.2 6.1 .. .. .. .. .. 104 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Annual Forecasta Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 South Asia 5.6 6.9 6.0 7.5 4.7 5.3 5.6 5.8 .. .. .. .. .. Bangladesh 7.6 8.9 8.3 4.1 4.3 5.4 5.6 5.9 .. .. .. .. .. India 5.4 5.8 6.9 6.2 3.8 6.1 5.8 6.1 49.8 -23.7 -19.0 .. .. Nepal 5.1 1.3 13.1 15.9 -2.5 5.1 5.4 5.4 .. .. .. .. .. Pakistan 7.0 -0.6 0.0 7.3 10.2 3.0 3.3 3.5 .. .. .. .. .. Sri Lanka 5.2 1.6 5.5 4.2 6.3 6.6 6.0 5.8 .. .. .. .. .. Sub-Saharan Africa 5.9 7.0 13.3 2.7 5.8 5.2 4.9 4.8 .. .. .. .. .. Angola 5.6 10.4 23.4 5.2 9.0 8.4 7.0 6.6 .. .. .. .. .. Benin 3.2 2.9 4.2 5.2 6.7 6.1 5.8 5.3 .. .. .. .. .. Botswana 1.2 3.7 5.0 10.5 5.5 4.5 4.5 4.0 6.3 -3.6 17.3 19.8 .. Burkina Faso 4.1 3.6 9.5 8.4 10.2 9.6 8.8 8.0 .. .. .. .. .. Burundi 16.7 25.7 2.3 2.0 4.5 4.2 4.0 4.0 .. .. .. .. .. Cote d'Ivoire 3.2 4.9 -5.0 9.0 9.0 9.0 6.0 4.0 .. .. .. .. .. Cameroon 4.9 5.2 9.0 -3.2 1.1 1.1 2.1 2.6 .. .. .. .. .. Cabo Verde 6.2 3.3 7.5 19.1 3.5 3.6 3.9 2.0 .. .. .. .. .. Chad 9.5 0.7 -6.3 5.4 3.0 3.0 3.0 14.0 .. .. .. .. .. Comoros 4.5 -2.1 -4.9 0.5 4.5 4.8 5.0 5.0 .. .. .. .. .. Congo, Democratic Rep. 4.5 7.2 6.9 7.3 7.6 7.5 6.5 5.5 .. .. .. .. .. Congo, Rep. 11.8 6.7 2.8 2.6 2.6 3.0 2.8 2.5 .. .. .. .. .. Eritrea -6.6 30.1 -9.5 8.0 10.2 7.6 5.7 6.4 .. .. .. .. .. Ethiopia 0.1 6.2 0.8 -11.5 7.0 8.5 7.5 7.0 .. .. .. .. .. Gabon 4.2 0.7 6.3 18.2 6.0 6.0 6.0 6.0 .. .. .. .. .. Gambia 6.6 9.3 -3.4 5.3 5.3 4.9 5.0 5.0 .. .. .. .. .. Ghana 3.1 14.0 49.8 5.1 5.1 4.7 4.0 4.0 .. .. .. .. .. Guinea 12.6 69.2 3.8 4.5 5.5 6.0 5.8 3.5 .. .. .. .. .. Guinea-Bissau -1.0 5.7 -10.0 -27.2 1.6 3.0 3.0 3.0 .. .. .. .. .. Kenya 2.2 9.2 10.6 1.3 3.5 3.4 3.3 3.1 .. .. .. .. .. Lesotho 2.8 3.0 -6.3 17.6 12.2 9.0 7.2 6.1 .. .. .. .. .. Madagascar 5.4 -5.5 -5.6 6.5 5.0 5.0 4.7 4.7 .. .. .. .. .. Malawi 5.9 -19.6 10.0 2.5 2.8 4.0 4.5 4.5 .. .. .. .. .. Mali 8.8 8.7 9.9 -4.2 3.0 3.8 3.9 3.8 .. .. .. .. .. Mauritania 7.2 6.9 7.2 6.4 6.0 6.0 5.0 4.0 .. .. .. .. .. Mauritius 3.2 3.4 2.3 1.1 1.1 4.0 4.0 2.0 59.6 -13.2 18.4 .. .. Mozambique 8.2 12.8 7.8 20.0 11.0 11.3 11.3 11.0 .. .. .. .. .. Namibia 3.7 6.0 8.2 7.9 2.0 2.6 2.6 2.6 .. .. .. .. .. Niger 6.3 -7.5 10.9 7.1 4.8 4.9 5.0 4.5 .. .. .. .. .. Nigeria 30.0 11.9 7.3 -12.6 8.0 7.2 6.3 5.6 .. .. .. .. .. Rwanda 7.8 10.3 4.5 14.6 4.0 6.2 5.5 5.5 .. .. .. .. .. Senegal 3.4 3.1 4.2 6.4 6.0 5.5 5.0 4.5 .. .. .. .. .. Seychelles -1.0 -1.6 4.6 3.0 4.0 4.4 5.0 4.5 .. .. .. .. .. Sierra Leone 5.2 3.7 2.0 105.2 31.6 14.1 13.6 13.0 .. .. .. .. .. South Africa 4.2 5.0 4.6 4.2 3.5 3.0 3.4 3.4 .. .. .. .. .. South Sudan 6.5 28.0 16.2 3.1 18.0 11.0 10.0 10.0 .. .. .. .. .. Sudan 8.3 5.2 18.9 11.1 8.0 2.9 2.0 2.0 .. .. .. .. .. Swaziland -2.4 5.2 18.9 11.1 8.0 2.9 2.0 2.0 .. .. .. .. .. Tanzania 11.3 17.0 271.9 7.9 8.5 8.2 7.6 7.5 .. .. .. .. .. Togo 2.5 -16.0 15.8 8.0 8.7 7.5 6.7 5.8 .. .. .. .. .. Uganda 4.2 3.7 7.4 -15.4 17.4 15.6 10.2 8.2 .. .. .. .. .. Zambia 12.1 -0.5 16.2 2.7 7.4 7.0 6.6 6.4 .. .. .. .. .. Zimbabwe -1.3 1.1 5.6 4.0 4.0 4.0 4.0 1.8 .. .. .. .. .. a. Percent contribution to GDP growth b. Quarter over quarter growth, seasonally adjusted c. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 105 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.4 Private consumption growth (Constant 2010 U.S. dollars) Annual Forecasta Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 World 2.4 3.0 3.0 2.3 2.3 2.8 3.1 3.3 .. .. .. .. .. High Income Countries 1.8 2.1 1.7 1.4 1.5 2.2 2.4 2.5 .. .. .. .. .. Euro Area 1.1 1.0 0.3 -1.3 -0.5 0.8 1.3 1.6 .. .. .. .. .. OECD Countries 1.6 2.1 1.7 1.2 1.4 2.0 2.4 2.4 .. .. .. .. .. Non-OECD Countries 4.9 4.5 5.3 5.2 3.5 2.9 2.9 3.8 .. .. .. .. .. Developing Countries 4.7 5.8 6.8 4.6 4.6 4.3 4.9 5.3 .. .. .. .. .. East Asia and the Pacific 5.9 7.3 9.1 7.6 6.8 7.3 7.5 7.6 .. .. .. .. .. China 6.9 8.3 11.1 8.2 7.6 8.4 8.3 8.5 .. .. .. .. .. Cambodia 6.6 8.8 10.4 7.0 7.0 7.0 7.0 7.0 .. .. .. .. .. Indonesia 3.8 4.7 4.7 5.3 5.3 5.1 5.3 5.3 10.0 2.6 -13.4 .. .. Lao People's Dem. Rep. 3.0 9.1 9.8 7.0 7.0 7.0 7.0 7.3 .. .. .. .. .. Malaysia 6.0 6.9 6.8 7.7 7.6 5.9 6.0 6.0 9.9 10.2 -5.4 6.0 .. Mongolia 7.1 11.0 13.6 19.6 8.0 7.0 7.0 7.0 .. .. .. .. .. Papua New Guinea 5.9 44.1 9.7 7.7 5.5 5.3 7.0 5.0 .. .. .. .. .. Philippines 4.0 3.4 5.7 6.6 5.6 5.4 5.0 5.4 8.1 -3.8 -4.2 7.2 .. Solomon Islands 0.4 3.7 9.0 6.6 5.0 6.6 6.7 5.0 .. .. .. .. .. Thailand 3.3 4.8 1.3 6.7 0.3 0.7 4.0 4.3 10.1 0.3 -18.6 -11.8 .. Vanuatu 3.9 4.0 3.9 4.0 4.0 4.0 3.0 3.0 .. .. .. .. .. Viet Nam 6.1 8.2 4.1 4.9 5.4 5.8 6.7 4.8 .. .. .. .. .. Europe and Central Asia 4.7 4.4 7.0 1.4 4.8 1.9 3.5 4.1 .. .. .. .. .. Albania 5.4 3.8 8.0 -7.6 -1.3 -1.2 4.3 4.7 .. .. .. .. .. Armenia 6.3 3.8 2.4 9.1 3.8 4.7 4.5 4.5 2.6 -1.1 26.2 .. .. Azerbaijan 10.9 -15.0 23.9 2.2 7.1 10.2 10.3 10.7 .. .. .. .. .. Belarus 10.0 2.3 -3.5 9.5 4.5 4.0 4.4 4.4 -14.9 22.7 9.8 .. .. Bulgaria 4.5 0.1 1.8 2.3 2.4 2.6 3.3 2.8 4.5 -2.7 5.0 .. .. Georgia 6.5 -1.2 15.0 5.1 2.3 3.1 6.1 6.1 .. .. .. .. .. Hungary 2.0 -2.2 0.0 -1.4 0.8 2.7 2.3 2.0 -6.8 -2.8 -3.2 22.5 .. Kazakhstan 7.7 11.3 11.0 9.7 11.0 6.0 8.0 6.6 .. .. .. .. .. Kyrgyz Republic 6.2 2.7 9.3 14.2 6.4 6.1 5.1 4.0 39.9 46.0 -8.0 .. .. Macedonia, FYR 2.8 1.3 4.0 -1.2 1.9 2.2 2.6 2.1 .. .. .. .. .. Moldova 5.5 9.1 5.7 2.1 5.6 2.7 1.0 4.8 .. .. .. .. .. Romania 6.6 -0.1 1.2 1.0 1.7 2.0 2.4 2.4 19.8 7.8 .. .. .. Turkey 3.3 6.7 7.7 -0.5 4.6 2.0 3.0 4.0 18.6 -1.3 -16.9 .. .. Ukraine 8.9 7.1 15.0 5.1 5.6 -7.6 0.7 3.4 3.4 21.8 4.6 .. .. Uzbekistan 7.9 -0.7 0.1 5.7 6.0 6.0 6.0 6.0 .. .. .. .. .. Latin America and the Caribbean 3.3 5.7 5.2 3.9 3.0 1.6 2.4 2.8 .. .. .. .. .. Argentina 3.0 7.1 10.8 4.2 4.4 0.0 1.0 2.0 -10.0 -6.5 -23.1 .. .. Belize 2.0 6.3 6.1 5.3 1.1 2.1 2.8 3.0 .. .. .. .. .. Bolivia 2.9 4.0 5.2 4.6 6.5 6.5 5.5 5.3 .. .. .. .. .. Brazil 3.1 6.9 4.1 3.1 2.3 1.5 2.1 2.5 13.8 -8.9 -22.7 .. .. Colombia 3.2 5.0 5.9 4.4 4.5 4.0 4.0 3.9 .. .. .. .. .. Costa Rica 3.3 4.5 4.3 4.5 3.1 3.2 3.3 3.3 .. .. .. .. .. Dominica 1.7 -8.4 -5.8 -6.0 2.0 1.7 1.8 2.1 .. .. .. .. .. Dominican Republic 5.5 7.7 3.9 1.6 1.0 3.1 3.3 3.4 .. .. .. .. .. Ecuador 4.1 5.3 6.2 4.0 3.4 3.8 3.5 3.5 .. .. .. .. .. El Salvadore 1.7 2.2 2.4 1.3 0.3 0.7 1.2 1.4 .. .. .. .. .. Guatemala 3.3 3.4 3.7 2.6 3.9 3.3 3.3 3.5 .. .. .. .. .. Guyana 1.6 2.6 3.1 3.5 3.5 3.5 2.5 2.5 .. .. .. .. .. Haiti 1.0 16.7 -5.6 -5.7 4.7 3.8 3.8 3.7 .. .. .. .. .. Honduras 4.2 3.6 3.6 3.0 1.5 2.4 3.1 3.3 .. .. .. .. .. Jamaica 1.0 -1.1 3.5 -0.9 0.2 0.5 1.0 1.6 .. .. .. .. .. Mexico 1.8 5.3 4.9 4.7 2.5 1.9 3.0 3.3 .. .. .. .. .. Nicaragua 3.4 3.2 2.2 4.7 3.8 3.9 4.0 4.0 .. .. .. .. .. Panama 3.6 25.8 11.6 -1.4 5.3 4.5 4.2 4.0 .. .. .. .. .. Paraguay 3.0 13.7 8.6 1.0 6.2 4.2 3.5 3.1 .. .. .. .. .. Peru 4.4 6.3 6.1 6.1 5.4 4.0 5.0 5.0 7.1 -0.9 -8.7 .. .. St. Lucia 2.9 11.5 6.8 -7.2 0.0 1.0 1.5 2.1 .. .. .. .. .. St. Vincent and the Grenadines 1.9 -0.2 2.8 4.0 2.0 1.8 2.0 3.0 .. .. .. .. .. Venezuela, Bolivarian Rep. of 5.8 -1.9 4.0 7.0 3.9 -1.3 0.2 1.5 .. .. .. .. .. Middle East and North Africa 4.1 3.5 2.1 1.2 0.8 2.2 3.3 3.5 .. .. .. .. .. Algeria 1.9 5.9 5.0 6.4 6.1 5.0 4.5 4.5 .. .. .. .. .. Egypt 4.0 5.1 4.0 6.4 2.2 -1.0 3.5 3.8 .. .. .. .. .. Iran, Islamic Rep. of 4.5 1.9 2.0 -1.4 0.4 2.3 2.9 3.0 .. .. .. .. .. Jordan 5.5 -3.0 4.7 6.5 1.1 1.9 2.5 3.1 .. .. .. .. .. Lebanon 3.7 5.3 0.4 2.6 2.3 2.4 3.3 3.7 .. .. .. .. .. Morocco 4.1 2.2 6.1 1.7 3.8 2.5 4.1 4.1 .. .. .. .. .. Syrian Arab Republic 4.0 7.6 -9.7 -20.8 -20.5 -2.0 0.0 0.0 .. .. .. .. .. Tunisia 4.2 1.0 -2.7 4.8 3.0 3.0 3.0 3.0 .. .. .. .. .. Yemen 6.9 5.5 -9.0 4.0 4.1 3.6 3.7 3.7 .. .. .. .. .. 106 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Annual Forecasta Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 South Asia 5.2 6.8 9.0 5.4 4.1 5.3 5.9 6.2 .. .. .. .. .. Bangladesh 4.2 5.1 6.0 4.5 5.6 5.4 5.8 6.0 .. .. .. .. .. India 6.1 8.7 9.3 5.0 4.8 5.8 6.3 6.6 -8.3 5.6 -15.1 .. .. Nepal 3.7 6.0 0.5 5.2 4.6 5.5 5.0 4.9 .. .. .. .. .. Pakistan 3.3 1.7 4.6 5.0 2.5 3.4 3.7 3.7 .. .. .. .. .. Sri Lanka 4.1 9.2 14.7 3.8 6.5 6.9 6.6 6.3 .. .. .. .. .. Sub-Saharan Africa 5.4 2.2 4.0 0.6 4.8 4.6 4.3 4.4 .. .. .. .. .. Angola 17.0 16.8 10.0 7.3 9.0 7.6 6.6 6.8 .. .. .. .. .. Benin 3.0 3.0 0.0 4.0 6.8 4.3 4.3 4.3 .. .. .. .. .. Botswana 6.8 8.6 7.9 2.7 6.0 5.5 5.5 5.2 21.5 -30.6 -21.7 .. .. Burkina Faso 3.2 -0.3 7.8 15.3 8.2 7.8 7.0 6.3 .. .. .. .. .. Burundi 2.8 3.9 3.9 4.1 4.5 4.3 4.0 3.0 .. .. .. .. .. Cote d'Ivoire 0.7 7.4 -2.5 9.1 8.0 8.0 4.5 2.0 .. .. .. .. .. Cameroon 3.2 1.2 -0.6 6.2 5.0 5.7 5.7 5.5 .. .. .. .. .. Cabo Verde 4.1 -1.2 4.0 4.3 0.9 1.8 2.0 4.0 .. .. .. .. .. Chad 4.1 7.8 3.9 3.9 -6.4 4.0 2.0 18.0 .. .. .. .. .. Comoros 3.0 0.7 0.6 0.9 1.3 1.5 1.7 1.7 .. .. .. .. .. Congo, Democratic Rep. 4.1 6.7 4.4 4.5 7.1 6.5 5.2 4.0 .. .. .. .. .. Congo, Rep. 6.5 20.2 -8.3 7.4 2.8 4.0 3.0 2.8 .. .. .. .. .. Eritrea 2.0 -6.1 -17.6 6.7 16.3 13.0 5.0 3.5 .. .. .. .. .. Ethiopia 9.0 11.1 3.4 5.7 6.6 6.7 6.7 6.5 .. .. .. .. .. Gabon 2.8 7.5 9.0 4.2 5.0 5.0 5.5 6.0 .. .. .. .. .. Gambia 3.4 6.8 -2.3 5.3 5.3 5.3 5.3 5.2 .. .. .. .. .. Ghana 5.6 9.6 12.9 9.2 5.7 5.7 5.7 5.5 .. .. .. .. .. Guinea 2.0 -19.4 3.5 3.5 3.5 3.8 3.6 3.2 .. .. .. .. .. Guinea-Bissau 2.8 2.9 -2.0 9.2 1.4 3.0 3.0 3.0 .. .. .. .. .. Kenya 3.4 7.2 2.8 5.7 6.0 6.6 6.3 5.9 .. .. .. .. .. Lesotho 2.3 8.1 4.9 -2.3 6.0 5.5 5.5 5.0 .. .. .. .. .. Madagascar 1.8 -0.9 3.0 3.0 2.8 3.9 4.5 4.5 .. .. .. .. .. Malawi 9.1 -0.3 8.0 2.1 2.3 4.6 4.4 4.1 .. .. .. .. .. Mali 8.2 6.7 6.7 6.7 1.0 6.2 6.1 5.8 .. .. .. .. .. Mauritania 6.8 24.3 -1.1 28.9 4.5 4.5 3.8 3.7 .. .. .. .. .. Mauritius 4.5 2.6 2.5 3.7 3.7 4.0 4.0 2.0 -2.4 -0.5 15.2 .. .. Mozambique 4.5 5.4 11.9 0.3 7.0 7.6 7.6 7.0 .. .. .. .. .. Namibia 5.1 4.4 4.5 8.0 2.2 2.8 3.0 3.4 .. .. .. .. .. Niger 3.1 5.2 5.3 4.7 4.6 4.8 4.5 4.0 .. .. .. .. .. Nigeria 8.7 -9.0 8.9 -11.3 6.5 5.9 4.4 4.4 .. .. .. .. .. Rwanda 6.4 8.1 5.5 5.9 5.5 6.6 6.0 6.0 .. .. .. .. .. Senegal 4.3 2.2 -2.5 1.5 4.0 4.0 4.2 4.2 .. .. .. .. .. Seychelles 11.2 28.3 9.9 2.7 3.8 5.0 5.2 3.0 .. .. .. .. .. Sierra Leone 8.7 2.6 19.6 7.2 8.0 7.8 7.8 7.6 .. .. .. .. .. South Africa 3.6 4.4 4.8 3.5 2.3 2.0 2.5 3.0 .. .. .. .. .. South Sudan 4.5 7.0 1.5 -24.3 15.0 3.0 3.1 3.2 .. .. .. .. .. Sudan 4.7 5.3 -3.3 -10.1 3.2 2.5 3.0 3.0 .. .. .. .. .. Swaziland 6.7 -5.1 -6.6 -3.1 1.4 1.4 1.8 1.7 .. .. .. .. .. Tanzania 5.1 6.1 -65.6 5.5 2.8 3.6 4.0 4.0 .. .. .. .. .. Togo -0.5 -1.7 1.5 1.9 2.5 2.5 2.2 2.5 .. .. .. .. .. Uganda 5.8 11.0 8.4 6.1 6.8 7.6 6.6 6.6 .. .. .. .. .. Zambia 5.4 -16.2 19.6 17.1 6.0 6.0 5.5 5.5 .. .. .. .. .. Zimbabwe -3.0 7.0 3.0 1.2 2.5 2.0 1.1 0.9 .. .. .. .. .. a. Annual percentage change b. Quarter over quarter growth, seasonally adjusted and annualized c. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 107 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.5 Fixed investment growth (Constant 2010 U.S. dollars) Annual Forecasta Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 World 2.6 5.6 5.7 4.1 3.1 3.6 4.9 5.3 .. .. .. .. .. High Income Countries 0.3 2.1 3.9 2.5 1.4 2.7 3.9 4.4 .. .. .. .. .. Euro Area 0.1 -0.4 1.6 -3.8 -3.3 1.8 3.2 3.3 .. .. .. .. .. OECD Countries -0.1 1.9 3.9 2.3 1.2 2.9 4.1 4.0 15.3 -2.9 0.8 .. .. Non-OECD Countries 5.5 7.7 7.3 4.1 3.5 1.2 2.8 5.0 32.3 -9.0 -0.8 -7.6 .. Developing Countries 8.2 11.2 8.3 6.4 5.5 4.8 6.1 6.3 .. .. .. .. .. East Asia and the Pacific 10.7 11.4 8.6 9.5 7.9 6.9 6.9 6.7 6.7 7.4 -4.4 0.1 .. China 12.0 11.6 9.1 9.1 8.3 7.2 7.0 6.8 .. .. .. .. .. Cambodia 10.4 -9.8 10.8 13.1 14.4 11.2 12.9 12.6 .. .. .. .. .. Indonesia 6.3 8.5 8.8 9.7 4.7 5.3 5.5 5.6 -2.4 7.9 -12.0 .. .. Lao People's Dem. Rep. 14.4 -12.8 17.5 30.3 15.0 11.5 9.1 9.7 .. .. .. .. .. Malaysia 2.5 11.9 6.2 19.9 8.2 3.0 4.5 4.0 6.8 7.4 -4.3 0.1 .. Mongolia 2.7 33.0 65.5 28.2 13.4 11.0 6.1 3.2 .. .. .. .. .. Papua New Guinea 5.0 34.3 22.0 16.0 3.0 18.6 7.4 5.7 .. .. .. .. .. Philippines 2.3 19.1 -2.0 10.4 11.7 11.5 11.5 10.0 11.2 -13.1 0.2 24.6 .. Solomon Islands 13.5 99.0 23.8 13.0 5.5 3.5 -0.4 2.0 .. .. .. .. .. Thailand 3.9 9.4 3.3 13.2 -1.9 -1.8 4.5 4.5 -2.4 -1.4 -31.6 -11.3 .. Vanuatu 15.6 2.7 -9.6 -2.5 -1.1 0.0 2.5 2.5 .. .. .. .. .. Viet Nam 10.1 10.9 -7.8 1.9 6.0 6.7 7.0 6.0 .. .. .. .. .. Europe and Central Asia 5.0 11.1 10.3 -0.7 3.2 -0.2 7.3 7.9 24.6 -9.2 -6.2 .. .. Albania 7.5 -11.5 8.9 6.5 -1.8 0.6 -1.4 1.8 .. .. .. .. .. Armenia 13.7 -2.9 -11.7 -1.9 6.5 5.0 6.0 6.1 -18.9 -26.0 -5.6 .. .. Azerbaijan 13.2 4.3 12.0 2.2 34.2 21.1 6.4 -3.1 .. .. .. .. .. Belarus 13.6 17.5 11.1 -7.1 5.2 0.8 2.5 -0.8 19.1 9.3 47.5 .. .. Bulgaria 10.7 -18.3 -6.5 0.8 -10.5 -4.1 2.6 5.7 10.0 -5.9 38.9 .. .. Georgia 9.3 21.9 -9.6 12.3 8.0 7.4 5.2 6.6 .. .. .. .. .. Hungary 1.4 -9.7 -3.8 -12.0 6.6 5.3 4.4 9.8 -5.6 35.9 11.6 21.4 .. Kazakhstan 13.5 3.8 4.0 3.2 5.9 1.3 2.0 2.4 .. .. .. .. .. Kyrgyz Republic 7.5 -7.2 -4.4 17.5 11.5 3.7 5.0 4.8 -51.4 -10.4 -6.3 .. .. Macedonia, FYR 3.6 -4.3 17.3 12.1 15.8 8.0 4.5 8.6 .. .. .. .. .. Moldova 7.2 17.2 13.3 0.8 3.1 -2.0 6.5 6.7 .. .. .. .. .. Romania 8.1 -2.3 7.3 5.2 -11.8 10.4 5.9 1.5 18.8 -2.2 .. .. .. Turkey 2.1 30.5 18.0 -2.7 4.3 -2.2 10.5 13.4 29.4 -10.8 -8.7 .. .. Ukraine 1.6 4.9 7.1 2.8 -6.6 -23.2 6.3 5.4 21.5 -48.0 15.5 .. .. Uzbekistan 8.9 3.5 7.2 6.1 18.2 0.2 11.6 9.2 .. .. .. .. .. Latin America and the Caribbean 3.8 11.7 8.2 2.1 2.7 1.2 4.1 5.0 .. .. .. .. .. Argentina 3.7 21.2 18.2 -5.2 2.9 -1.0 2.0 4.5 .. .. .. .. .. Belize -1.6 -21.2 -0.8 3.5 2.0 3.0 4.0 5.0 .. .. .. .. .. Bolivia 2.8 7.5 23.7 1.5 10.5 9.0 5.5 5.0 .. .. .. .. .. Brazil 3.1 21.3 4.7 -4.0 6.2 0.0 4.0 5.0 27.5 6.6 -29.8 .. .. Colombia 9.6 4.9 18.7 4.6 5.7 5.9 5.7 5.2 .. .. .. .. .. Costa Rica 4.6 5.5 8.8 8.1 11.8 5.5 6.1 6.2 .. .. .. .. .. Dominica 4.4 7.1 4.2 10.4 2.3 4.0 5.5 3.5 .. .. .. .. .. Dominican Republic 1.3 17.6 -2.7 4.3 -2.9 6.0 6.7 7.0 .. .. .. .. .. Ecuador 7.3 5.1 15.9 11.4 6.6 5.5 5.0 4.5 .. .. .. .. .. El Salvadore -0.4 2.4 13.8 -1.1 9.7 5.0 5.2 5.5 .. .. .. .. .. Guatemala 1.0 -2.1 6.6 4.2 1.8 2.7 3.0 3.5 .. .. .. .. .. Guyana -1.2 9.0 13.2 9.2 7.5 5.5 4.5 4.0 .. .. .. .. .. Haiti 1.4 -6.4 9.0 5.9 6.6 5.1 4.8 4.6 .. .. .. .. .. Honduras 1.2 1.4 22.1 3.0 1.5 4.0 4.5 6.0 .. .. .. .. .. Jamaica 0.3 -2.6 8.1 -5.0 0.3 2.0 2.5 3.0 .. .. .. .. .. Mexico 2.3 1.3 7.9 4.6 -1.7 2.5 4.9 6.0 .. .. .. .. .. Nicaragua -1.3 1.9 23.4 31.4 -8.3 2.5 5.0 7.0 .. .. .. .. .. Panama 6.8 11.6 18.0 23.0 19.0 15.0 8.5 5.0 .. .. .. .. .. Paraguay 3.6 21.7 11.0 -7.7 11.7 7.5 6.5 5.5 .. .. .. .. .. Peru 7.5 26.1 9.2 14.8 7.6 4.0 5.8 6.5 21.1 1.2 -19.9 .. .. St. Lucia 0.6 17.2 -11.6 3.0 0.0 1.5 3.5 5.0 .. .. .. .. .. St. Vincent and the Grenadines 6.4 -13.7 -6.0 8.2 3.5 1.0 5.5 4.0 .. .. .. .. .. Venezuela, Bolivarian Rep. of 6.3 -6.3 4.4 23.3 -9.8 -5.0 -0.6 1.0 .. .. .. .. .. 108 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Annual Forecasta Recent Quartersb 2013 2014 00-09c 2010 2011 2012 2013e 2014f 2015f 2016f Q1 Q2 Q3 Q4 Q1 Middle East and North Africa 6.7 4.4 -1.8 -0.9 1.5 0.7 2.1 3.3 .. .. .. .. .. Algeria 8.5 6.9 -24.7 6.6 11.5 -2.9 2.5 2.5 .. .. .. .. .. Egypt 5.3 5.5 -4.1 0.7 1.2 2.2 4.2 4.6 .. .. .. .. .. Iran, Islamic Rep. of 6.7 6.9 4.4 -5.4 0.0 1.1 1.0 1.5 .. .. .. .. .. Jordan 8.2 -13.3 3.2 11.2 2.4 3.0 4.0 5.3 .. .. .. .. .. Lebanon 9.9 6.8 3.0 1.7 0.8 0.0 3.6 4.4 .. .. .. .. .. Morocco 6.9 -0.7 2.5 2.7 2.7 3.0 4.1 4.8 .. .. .. .. .. Syrian Arab Republic 6.3 13.6 49.1 -11.2 -27.0 -7.5 -10.1 10.2 .. .. .. .. .. Tunisia 3.3 4.0 -3.6 6.3 0.9 -3.0 -0.7 4.6 .. .. .. .. .. Yemen 0.0 -7.4 -33.7 -2.0 30.9 27.7 13.3 8.6 .. .. .. .. .. South Asia 8.9 14.7 10.7 4.4 -0.3 2.9 6.0 7.1 .. .. .. .. .. Bangladesh 6.6 7.9 9.6 11.2 5.8 5.1 6.3 6.7 .. .. .. .. .. India 10.4 11.0 12.2 0.8 -2.7 4.3 6.5 7.2 -34.7 16.9 -23.6 .. .. Sri Lanka 5.3 9.2 14.6 10.6 7.3 8.1 7.9 7.5 .. .. .. .. .. Nepal 3.8 16.6 -0.7 -3.7 5.5 4.6 5.2 5.2 .. .. .. .. .. Pakistan 3.7 -5.0 -7.7 2.4 0.2 2.7 5.3 5.9 .. .. .. .. .. Sub-Saharan Africa 7.8 6.6 8.6 7.2 5.1 4.4 5.3 4.8 .. .. .. .. .. Angola 17.7 -8.3 8.6 66.7 5.5 9.8 4.6 4.5 .. .. .. .. .. Benin 5.1 -5.9 36.0 -12.5 5.0 1.9 3.0 3.0 .. .. .. .. .. Botswana 5.7 9.2 12.2 12.1 7.6 7.6 7.2 7.0 6.8 -12.6 -17.4 .. .. Burkina Faso 11.4 6.4 -8.0 22.1 12.0 11.2 9.0 6.4 .. .. .. .. .. Burundi 5.7 6.5 -29.9 8.5 6.5 6.0 4.0 2.0 .. .. .. .. .. Cameroon 6.0 17.5 19.4 11.3 3.2 2.3 2.5 2.3 .. .. .. .. .. Cabo Verde 9.7 18.8 6.2 -4.6 0.7 1.9 2.0 4.0 .. .. .. .. .. Chad 8.8 29.8 0.9 7.2 -30.0 -16.0 -18.0 25.0 .. .. .. .. .. Comoros 4.0 26.8 -9.1 0.6 5.0 8.9 9.4 -6.2 .. .. .. .. .. Congo, Democratic Rep. 11.1 7.2 6.9 7.2 11.0 9.0 6.4 5.5 .. .. .. .. .. Congo, Rep. 6.6 2.4 37.1 -0.1 -12.6 -10.7 0.7 -2.6 .. .. .. .. .. Cote d'Ivoire 0.4 2.0 -10.4 -3.1 18.4 14.0 3.0 1.1 .. .. .. .. .. Eritrea -7.9 7.5 14.6 11.1 22.2 17.3 12.4 12.1 .. .. .. .. .. Ethiopia 8.5 27.9 22.7 30.5 15.2 8.1 7.0 5.9 .. .. .. .. .. Gabon 5.4 10.8 27.4 16.1 11.6 11.6 13.6 15.0 .. .. .. .. .. Gambia 0.5 16.4 -14.2 16.5 14.4 9.6 7.4 7.0 .. .. .. .. .. Ghana 1.4 24.4 37.6 20.9 10.4 7.0 9.2 10.4 .. .. .. .. .. Guinea 1.1 31.3 29.4 30.7 -14.0 18.4 15.4 3.0 .. .. .. .. .. Guinea-Bissau 3.2 1.2 58.2 -56.7 -28.0 10.0 7.0 -11.0 .. .. .. .. .. Kenya 7.3 7.7 12.5 11.5 1.5 8.9 8.2 4.8 .. .. .. .. .. Lesotho -0.4 9.6 7.2 21.1 14.0 12.0 10.0 7.0 .. .. .. .. .. Madagascar 9.6 -12.6 13.1 4.4 3.0 4.0 4.4 4.4 .. .. .. .. .. Malawi 23.5 -14.6 -43.1 -26.9 -25.0 11.6 12.0 10.6 .. .. .. .. .. Mali 17.9 -1.3 -3.4 -3.3 20.0 16.0 12.4 12.0 .. .. .. .. .. Mauritania 11.8 24.9 58.3 25.5 6.1 9.5 5.0 4.6 .. .. .. .. .. Mauritius 4.9 -0.7 1.4 -1.5 0.1 4.0 4.0 -2.4 9.4 -2.3 7.1 .. .. Mozambique 3.0 6.9 9.9 55.0 11.0 14.0 11.4 6.2 .. .. .. .. .. Namibia 6.9 8.3 1.0 0.1 1.1 3.4 3.7 3.5 .. .. .. .. .. Niger 15.7 17.1 0.9 -1.4 5.6 5.9 5.3 4.3 .. .. .. .. .. Nigeria 11.3 18.3 -10.8 -19.9 12.0 7.5 7.9 3.8 .. .. .. .. .. Rwanda 12.1 7.3 12.1 16.1 7.0 12.6 10.6 10.0 .. .. .. .. .. Senegal 5.1 1.5 2.2 4.7 -0.5 0.9 2.4 1.0 .. .. .. .. .. Seychelles -5.3 47.8 0.5 1.8 7.5 11.2 10.0 7.3 .. .. .. .. .. Sierra Leone 9.3 84.8 55.6 41.6 -13.7 10.6 10.2 9.4 .. .. .. .. .. South Africa 7.5 -2.0 4.5 5.7 0.7 -2.1 2.4 2.4 .. .. .. .. .. South Sudan 6.3 -5.7 19.1 -64.8 55.4 19.4 11.1 13.4 .. .. .. .. .. Sudan 6.4 -0.4 -13.7 -39.4 2.5 1.1 0.1 0.0 .. .. .. .. .. Swaziland -2.4 20.0 -30.9 16.6 19.5 2.1 2.2 2.0 .. .. .. .. .. Tanzania 11.0 10.2 31.4 11.3 7.4 6.6 6.0 5.5 .. .. .. .. .. Togo 5.4 13.7 -2.5 18.3 1.6 1.5 1.6 1.9 .. .. .. .. .. Uganda 9.6 9.9 10.3 2.9 -1.4 2.1 2.2 2.3 .. .. .. .. .. Zambia 10.9 23.9 21.7 7.3 0.5 7.4 8.0 7.5 .. .. .. .. .. Zimbabwe -7.2 6.7 139.6 -27.3 29.7 7.2 7.4 -4.1 .. .. .. .. .. a. Annual percentage change b. Quarter over quarter growth, seasonally adjusted and annualized c. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 109 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.6 Trade (Constant 2010 U.S. dollars) Exports Imports Net Exports Contribution to Growth 00-09 a 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f World 3.7 12.7 6.2 2.7 2.6 4.1 5.2 5.4 3.6 13.0 6.6 2.5 2.6 4.4 5.2 5.5 0.0 0.0 -0.1 0.1 0.0 -0.1 0.0 0.0 High Income Countries 2.9 11.3 5.8 2.6 2.2 3.6 4.7 4.9 2.6 11.8 5.5 1.7 1.9 4.2 4.8 5.0 0.1 -0.1 0.1 0.3 0.1 -0.2 0.0 0.0 Euro Area 2.2 11.4 6.6 2.6 1.3 3.2 4.4 4.7 2.2 9.9 4.6 -0.7 0.1 2.7 4.0 4.5 0.1 0.6 0.9 1.4 0.6 0.3 0.3 0.3 OECD Countries 2.4 11.4 5.9 2.8 2.0 3.8 4.1 4.1 2.2 11.6 5.1 1.3 1.4 3.3 3.9 4.1 0.0 -0.1 0.2 0.4 0.2 0.1 0.1 0.0 Non-OECD Countries 6.2 11.9 4.3 2.6 3.7 3.9 4.6 4.8 5.4 15.5 7.2 4.6 6.3 4.7 5.1 6.0 0.8 -0.4 -1.1 -0.8 -1.2 -0.2 0.0 -0.5 Developing Countries 6.2 16.2 7.3 2.8 3.7 5.5 6.4 6.6 7.0 16.2 9.3 4.4 4.5 4.8 6.3 6.6 -0.1 0.1 -0.5 -0.5 -0.2 0.2 0.0 0.0 East Asia and the Pacific 9.0 22.2 5.3 3.2 4.9 7.3 7.5 7.5 8.5 18.4 6.4 5.1 6.7 7.4 8.1 8.0 0.4 1.6 -0.1 -0.5 -0.4 0.1 0.0 0.0 China 12.9 26.6 4.0 2.8 5.3 7.7 7.9 7.9 11.5 19.1 5.1 4.2 8.3 8.7 8.9 8.8 0.6 2.3 -0.1 -0.2 -0.6 -0.1 -0.1 -0.1 Indonesia 5.1 15.3 13.6 2.0 5.3 4.7 5.1 5.0 5.3 17.3 13.3 6.7 1.2 3.7 4.0 4.0 0.1 -0.1 0.3 -1.1 1.0 0.3 0.3 0.3 Cambodia 11.6 20.6 18.9 7.8 9.2 7.1 8.5 8.5 11.1 16.8 16.3 13.2 11.8 7.9 9.7 9.7 -0.3 0.7 0.5 -3.9 -2.5 -1.3 -1.8 -1.9 Lao People's Dem. Rep. 6.1 24.9 13.0 5.5 6.0 7.3 7.3 9.0 4.8 2.6 22.8 21.6 10.0 10.0 7.0 7.0 -1.0 6.6 -4.0 -7.3 -2.7 -2.3 -0.9 -0.3 Mongolia 7.4 6.8 28.1 -0.2 9.0 9.0 9.0 8.5 10.9 24.1 45.8 14.5 7.0 7.0 5.4 5.0 -0.6 -9.2 -13.2 -11.3 -0.8 -0.6 0.6 0.8 Malaysia 2.7 11.1 4.6 -0.1 -0.3 5.1 5.6 5.7 3.1 15.6 6.1 4.7 1.9 5.0 6.0 6.0 0.2 -1.1 -0.4 -3.7 -1.7 0.5 0.2 0.3 Philippines 2.6 21.0 -2.8 8.9 0.8 5.9 7.1 7.1 2.1 22.5 -1.0 5.3 4.3 5.3 6.7 7.0 0.1 -0.8 -0.6 1.0 -1.2 0.1 0.0 -0.1 Papua New Guinea 5.1 39.0 13.0 6.0 6.0 8.0 20.0 5.0 2.5 2.5 17.0 65.7 0.0 6.2 -4.3 7.0 0.9 18.0 -2.5 -41.4 3.9 -0.9 17.3 -2.2 Solomon Islands 10.8 44.9 11.0 0.0 3.0 3.0 5.0 5.0 5.9 30.1 23.7 10.8 8.0 5.0 4.8 4.0 -0.2 -4.9 -11.2 -7.5 -5.0 -3.0 -2.3 -1.7 Thailand 3.6 14.7 9.5 3.1 4.2 5.1 5.3 5.8 2.9 21.5 13.7 6.2 2.3 0.4 5.0 6.0 0.2 -2.3 -2.0 -2.1 1.5 3.6 0.6 0.3 Viet Nam 12.0 8.4 10.8 15.7 13.8 15.1 13.0 11.0 13.4 8.2 4.1 9.1 14.1 15.7 14.1 10.3 -0.9 -0.5 4.5 4.6 -0.1 -0.4 -1.0 0.7 Vanuatu 2.0 6.0 6.5 7.0 7.5 7.5 7.5 7.5 3.5 4.0 5.8 6.5 5.9 5.9 5.9 5.9 -0.7 0.6 0.0 -0.1 0.4 0.5 0.6 0.7 Europe and Central Asia 5.0 8.3 8.7 4.0 2.2 4.2 5.5 5.3 5.3 12.5 11.3 1.5 4.9 2.5 6.1 6.8 -0.1 -1.5 -1.1 0.9 -1.1 0.6 -0.4 -0.8 Albania 9.1 4.9 6.6 5.5 2.1 4.4 4.5 4.6 11.3 -3.1 13.2 -15.2 1.4 1.8 2.8 3.8 -3.0 3.4 -4.9 10.8 0.0 0.7 0.3 -0.2 Armenia 5.8 26.5 14.7 10.7 3.6 4.5 6.0 6.0 6.1 12.8 -1.4 -3.0 5.6 4.1 4.7 4.5 -1.4 -0.8 3.7 3.7 -1.3 -0.6 -0.4 -0.3 Azerbaijan 18.5 24.2 3.6 2.2 0.7 -1.1 1.2 2.7 15.9 1.3 35.6 2.2 13.3 9.4 7.6 5.5 3.7 10.8 -5.4 0.6 -3.3 -3.4 -1.8 -0.4 Bulgaria 5.7 14.7 12.3 -0.4 8.9 5.3 5.2 5.4 7.2 2.4 8.8 3.7 5.7 5.1 5.8 5.8 -1.6 6.0 1.8 -2.6 1.9 0.1 -0.5 -0.3 Belarus 4.7 7.7 28.4 -9.4 -3.0 -0.6 0.6 4.2 8.7 12.2 16.4 -10.2 3.8 4.3 4.0 4.0 -2.0 -3.8 4.3 1.4 -4.3 -3.3 -2.5 -0.6 Georgia 4.3 15.1 12.0 9.0 5.0 9.7 5.4 6.8 6.7 8.8 8.5 8.0 5.0 5.3 6.5 7.1 -0.8 0.4 -0.3 -1.0 -0.8 0.8 -1.5 -1.3 Hungary 7.1 14.3 8.3 1.7 3.1 5.2 4.8 3.6 5.8 12.8 6.3 0.1 4.0 5.9 5.9 7.3 0.7 1.8 2.1 1.5 -0.4 -0.1 -0.5 -3.2 Kazakhstan 3.6 1.9 3.5 2.7 -4.0 6.2 9.3 8.3 2.5 0.9 6.9 18.7 4.4 5.8 5.7 7.9 1.6 0.6 -0.5 -4.3 -3.1 0.4 1.7 0.7 Kyrgyz Republic 5.0 -11.7 15.7 -11.3 8.1 7.5 6.5 6.5 7.5 -6.9 14.9 18.5 1.3 4.1 5.0 3.0 -2.6 -0.8 -4.1 -22.8 2.7 -0.3 -1.5 0.4 Moldova 9.2 28.6 -1.0 1.9 11.9 6.6 6.9 6.6 9.3 19.3 0.3 2.3 5.9 6.6 7.5 7.5 -3.7 -4.3 -0.6 -1.1 0.0 -2.3 -3.0 -3.2 Macedonia, FYR -0.5 23.6 11.3 -0.4 4.4 5.2 8.0 8.0 1.3 9.5 14.1 3.6 8.0 5.0 4.1 5.4 -1.8 3.3 -3.9 -2.8 -3.8 -1.3 0.9 0.0 Romania 7.7 14.2 10.9 -3.1 12.0 5.6 5.4 6.4 11.4 12.5 10.3 -0.8 2.6 5.4 4.0 3.8 -1.0 -0.2 -0.4 -0.8 3.3 -0.1 0.4 1.0 Turkey 4.7 3.4 7.9 17.2 4.3 6.6 6.3 5.4 4.0 20.7 10.7 0.0 9.7 1.4 8.4 9.0 -0.2 -4.2 -1.2 3.6 -1.5 1.2 -0.8 -1.2 Ukraine 0.4 3.9 4.3 -7.2 -8.8 -6.2 4.2 4.6 1.7 11.3 16.8 3.6 -5.9 -10.0 2.4 4.1 -0.4 -3.7 -6.8 -5.8 -0.4 3.2 0.4 -0.3 Uzbekistan 13.2 6.6 20.5 12.7 1.5 3.9 4.5 4.5 14.7 -4.1 26.3 8.9 11.0 9.5 7.9 6.2 0.2 3.5 -1.0 1.5 -3.1 -1.9 -1.3 -0.7 Latin America and the Caribbean 2.0 9.5 7.1 3.1 1.1 1.9 4.4 5.5 3.8 21.8 11.1 4.8 2.6 1.4 3.1 4.1 -0.2 -1.9 -0.8 -0.4 -0.3 0.1 0.2 0.2 Argentina 3.7 14.4 4.9 -5.9 -5.3 -6.0 3.0 4.0 1.8 35.0 19.8 -4.7 1.7 -3.0 1.0 2.0 0.5 -1.8 -2.1 -0.2 -1.1 -0.4 0.3 0.3 Belize 4.3 14.4 3.8 4.5 0.7 2.5 4.0 4.6 -0.9 10.5 9.2 3.2 2.0 2.0 2.5 3.0 1.6 1.9 -3.0 0.7 -0.8 0.2 0.8 0.9 Bolivia 5.4 9.9 5.9 11.9 4.0 4.5 5.0 5.0 3.5 11.0 17.0 4.3 11.0 10.0 8.0 8.0 1.2 0.3 -3.4 3.3 -2.4 -2.0 -1.2 -1.3 Brazil 5.3 11.5 4.5 0.5 2.5 0.5 5.0 6.0 5.1 35.8 9.7 0.2 8.3 1.0 3.0 4.0 0.2 -2.2 -0.7 0.0 -0.8 -0.1 0.1 0.1 Colombia 4.0 1.3 12.9 6.1 5.3 3.0 4.5 5.5 7.2 10.8 21.2 9.0 2.1 2.6 3.5 4.0 -0.5 -1.6 -1.7 -0.8 0.5 0.0 0.1 0.1 Costa Rica 3.6 5.5 6.1 8.5 3.6 4.0 5.0 5.6 2.7 16.5 9.5 7.0 4.1 4.2 4.4 4.5 0.3 -4.0 -1.6 0.3 -0.3 -0.2 0.1 0.3 Dominica -0.6 3.8 2.9 0.5 1.0 1.5 3.0 4.0 0.5 -10.5 -12.3 4.6 4.5 3.5 4.0 3.0 -1.0 7.9 7.9 -2.1 -2.0 -1.3 -1.1 -0.1 Dominican Republic 0.0 11.6 8.8 5.4 7.6 3.5 4.5 6.0 0.7 14.4 2.9 1.0 -3.6 2.5 3.5 4.5 -0.3 -2.1 1.1 1.0 3.0 0.1 0.1 0.2 Ecuador 3.6 2.5 5.1 2.9 4.5 5.0 5.5 7.8 8.2 16.7 4.1 1.0 4.2 4.5 4.2 3.0 -1.1 -4.1 0.1 0.5 0.0 0.0 0.2 1.3 Guatemala 1.3 6.1 3.0 2.0 5.3 5.4 5.5 6.4 1.3 10.0 7.0 1.5 4.4 4.4 4.6 4.7 -0.4 -1.9 -1.8 0.0 -0.3 -0.2 -0.3 -0.1 Guyana 0.1 4.9 3.9 4.5 4.0 4.5 5.0 5.5 0.3 5.7 4.8 5.0 3.5 3.5 3.4 3.4 -0.6 -2.0 -1.7 -1.7 -0.7 -0.5 -0.1 0.2 Honduras 2.7 15.7 8.4 5.8 2.2 3.0 4.0 5.0 2.2 15.2 12.7 3.8 1.0 2.5 3.5 4.5 -0.3 -2.3 -4.2 0.1 0.4 -0.2 -0.4 -0.6 Haiti 3.9 -7.4 18.0 3.5 5.0 8.0 7.0 6.0 1.9 20.0 -5.0 -6.5 5.5 5.3 5.2 4.9 -1.4 -10.7 5.3 4.1 -2.1 -1.6 -1.7 -1.7 Jamaica -0.8 -7.5 -1.5 1.6 4.0 4.3 4.5 4.7 0.2 -4.9 4.7 -2.1 1.5 2.8 3.5 4.5 -0.8 0.1 -2.9 1.6 0.5 -0.1 -0.4 -0.9 St. Lucia 1.3 6.6 -7.3 4.3 2.0 1.0 3.5 4.5 2.0 14.3 -5.5 -4.2 3.0 1.5 2.5 3.5 -0.5 -4.9 -0.2 4.6 -0.7 -0.4 0.3 0.2 Mexico 1.1 20.5 8.2 5.9 1.4 3.4 4.2 5.6 2.2 20.5 8.0 5.4 1.2 2.4 3.6 5.2 -0.4 0.0 0.0 0.1 0.1 0.3 0.2 0.1 Nicaragua 6.9 12.2 8.0 13.4 3.1 4.0 5.5 6.0 3.8 5.8 12.5 10.3 -3.1 1.0 4.0 5.5 0.6 1.2 -3.5 -0.6 3.1 1.1 0.1 -0.4 Panama 5.8 5.0 24.2 14.8 2.7 4.5 5.0 6.5 4.0 26.0 26.5 8.2 7.5 6.4 4.5 4.0 2.0 -12.7 -1.3 5.7 -3.9 -1.5 0.4 2.1 Peru 5.7 1.3 6.9 3.7 -0.9 2.0 5.0 7.0 5.9 26.1 11.6 11.3 3.6 3.0 4.2 4.5 0.6 -4.6 -0.8 -1.7 -1.1 -0.2 0.2 0.6 Paraguay 2.9 19.7 2.8 -7.0 18.0 6.5 6.3 6.0 4.9 24.8 10.4 -3.5 7.2 6.5 6.0 5.5 -0.4 -1.4 -3.8 -1.9 5.3 0.2 0.3 0.4 El Salvadore 1.7 11.6 9.3 2.8 4.6 5.0 5.5 6.0 0.9 10.4 10.8 0.8 4.5 3.0 3.5 4.0 -0.3 -1.4 -2.2 0.4 -0.8 0.0 0.0 -0.1 St. Vincent and the Grenadines 1.8 2.2 -11.4 -2.6 4.0 2.0 4.0 5.0 4.0 -8.4 -15.1 8.0 4.0 1.8 4.0 3.2 -0.7 5.7 5.6 -4.5 -1.1 -0.5 -1.2 -0.5 Venezuela, Bolivarian Rep. of -2.8 -12.9 4.7 1.6 -4.2 1.0 2.9 3.5 7.7 -2.9 15.4 24.4 -10.1 -5.0 -1.0 0.5 -2.2 -3.6 -1.4 -4.3 1.2 1.3 1.0 0.8 Middle East and North Africa 4.1 7.0 -4.1 -6.6 -1.1 3.7 4.2 4.5 7.4 4.0 1.1 3.5 2.7 3.2 4.8 5.0 -0.7 0.8 -1.6 -3.0 -1.2 -0.1 -0.4 -0.5 Algeria 1.5 4.5 -2.0 -3.0 -7.3 7.0 3.5 3.6 7.5 0.1 -5.9 4.1 7.0 6.3 6.3 6.3 -1.0 1.7 1.1 -2.3 -4.5 0.3 -0.8 -0.9 Egypt 11.9 -3.0 3.7 -4.6 0.9 2.4 4.1 4.4 9.6 -3.2 8.1 11.2 0.6 -2.9 5.1 5.4 0.0 -0.7 -3.4 -2.6 0.9 0.5 -0.7 -0.8 Iran, Islamic Rep. of 3.7 8.2 -2.4 -18.6 -7.2 3.0 4.3 4.3 9.5 11.3 -0.1 -2.0 4.2 3.9 3.8 3.8 -0.6 -0.1 -0.6 -4.0 -2.3 -0.2 0.0 0.0 Jordan 4.1 24.2 -5.0 -3.4 8.0 7.7 7.5 7.4 4.7 -3.4 -3.5 6.3 4.0 4.8 5.2 5.6 -2.7 12.0 0.0 -5.6 0.6 0.1 -0.2 -0.4 Lebanon 9.4 12.8 -2.3 -7.3 4.0 3.4 4.2 4.1 8.0 3.1 -3.2 2.4 5.5 3.7 5.7 6.0 -1.6 1.1 1.1 -2.7 -1.9 -1.1 -2.1 -2.3 Morocco 4.5 16.6 2.1 2.9 8.9 3.1 6.5 6.0 6.2 3.6 5.0 1.9 5.4 2.7 5.1 5.1 -1.0 3.4 -1.5 0.1 0.6 -0.1 0.0 -0.1 Syrian Arab Republic 1.1 5.7 -40.1 -12.0 14.9 -8.6 -6.2 1.7 5.9 8.3 6.8 6.6 -6.0 -1.0 0.0 2.7 -1.3 -0.9 -16.6 -5.2 6.9 -2.5 -2.3 -1.4 Tunisia 2.8 4.8 -3.9 11.0 1.9 4.8 4.7 5.0 2.7 3.8 -9.2 13.9 3.5 3.5 3.6 3.8 -0.2 0.3 3.1 -1.7 -1.0 0.5 0.5 0.5 Yemen -0.4 15.8 -5.0 3.1 -3.0 5.0 6.0 6.0 5.1 -6.8 -1.8 0.0 4.8 5.8 7.9 7.6 -0.9 7.2 -0.9 1.0 -2.8 -0.7 -1.2 -1.1 110 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Exports Imports Net Exports Contribution to Growth 00-09 a 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f South Asia 11.6 13.3 17.9 7.2 5.5 6.7 6.6 7.0 9.4 15.5 16.0 9.4 -0.1 4.1 6.3 7.0 -0.2 -1.4 -0.7 -1.2 1.4 0.4 -0.3 -0.4 Bangladesh 9.0 0.9 29.3 7.8 3.5 6.8 7.3 7.5 6.2 0.7 29.2 7.5 1.3 6.4 7.5 7.6 -0.7 -2.4 -3.2 -0.4 -0.3 -1.2 -1.5 -1.5 India 11.9 19.6 15.6 5.0 8.4 6.0 6.7 7.0 13.1 15.6 21.1 6.6 -2.5 5.6 6.4 7.1 -0.1 -1.6 -0.4 -1.4 1.6 0.6 -0.2 -0.3 Sri Lanka 1.6 8.8 11.0 0.2 1.2 6.1 6.5 6.8 2.7 12.6 20.0 0.5 1.4 6.4 6.5 6.3 -0.5 -1.8 -3.7 -0.1 -0.2 -0.7 -0.6 -0.5 Nepal -1.2 -10.4 -2.1 1.9 6.2 5.6 5.8 6.1 3.9 28.3 -4.7 3.4 11.0 5.0 5.0 5.0 -2.3 -5.8 0.3 -2.7 -2.9 -1.7 -1.7 -1.6 Pakistan 5.8 15.7 2.4 -15.0 13.6 7.5 6.5 7.0 4.3 4.3 -0.1 -3.1 1.6 3.5 5.5 6.0 -0.3 1.0 -0.8 0.1 1.1 0.0 -0.4 -0.4 Sub-Saharan Africa 3.9 20.6 16.6 0.4 4.7 4.9 5.8 5.7 7.0 10.0 15.7 -2.4 4.7 4.3 4.4 3.9 -0.7 3.1 0.5 1.1 0.1 0.3 0.7 0.8 Angola 44.7 43.5 34.3 3.1 2.0 5.0 6.8 6.9 50.0 -1.9 30.1 8.5 3.2 6.9 6.6 6.5 1.6 20.4 8.5 -2.1 -0.2 0.1 1.5 1.7 Burundi 10.0 20.2 1.7 6.6 7.0 1.5 5.6 5.5 20.1 26.4 -14.6 4.6 6.0 5.0 5.0 4.0 -2.7 -6.9 5.9 -0.9 -1.3 -1.5 -1.2 -0.8 Benin 3.3 3.0 11.1 7.0 -2.0 6.0 5.5 5.5 2.7 0.8 18.0 -5.0 4.6 5.0 5.0 5.2 -0.3 0.2 -2.8 2.5 -1.5 -0.3 -0.4 -0.5 Burkina Faso 7.0 61.4 32.4 32.8 -2.0 -2.0 -1.0 1.0 6.3 2.9 19.3 49.4 8.0 7.0 5.0 3.0 -0.8 6.3 0.7 -7.0 -3.6 -3.2 -2.2 -1.0 Botswana -1.9 16.0 27.5 -7.0 6.0 6.0 5.0 5.0 3.1 6.5 19.2 8.2 2.0 2.0 1.0 0.5 -1.3 5.6 -0.5 -3.0 2.6 2.6 2.7 2.9 Cote d'Ivoire 3.7 3.6 2.0 7.1 5.2 5.0 6.0 5.0 4.6 8.2 4.4 4.9 6.3 7.8 4.0 2.0 0.2 -1.5 -0.9 1.6 0.0 -0.8 1.3 1.7 Cameroon 0.5 -1.6 0.3 -9.2 3.5 4.0 4.2 4.1 4.9 8.3 7.1 5.0 2.7 3.0 3.2 3.1 -1.5 -2.7 -2.0 -3.8 -0.1 0.0 0.0 0.0 Congo, Rep. 0.6 18.2 18.1 -2.7 6.0 9.0 9.5 8.8 6.7 22.5 10.0 -0.5 -3.0 -1.2 1.1 3.0 -2.7 3.3 10.0 -2.3 7.1 9.0 8.6 7.2 Comoros 5.8 6.9 15.0 6.0 6.0 7.0 8.0 10.2 0.4 10.8 -6.0 -2.0 1.0 4.0 6.0 -0.1 -0.7 -4.0 5.4 2.0 0.6 -0.4 -1.1 2.1 Cabo Verde 6.5 12.3 11.5 12.0 3.0 3.2 3.4 3.6 8.0 7.3 6.8 7.9 0.3 1.0 2.0 2.0 -3.0 -0.8 -0.6 -1.0 0.8 0.5 0.0 0.0 Eritrea 1.0 17.5 233.1 2.1 -17.2 6.3 19.6 -9.8 -6.9 11.3 10.6 3.0 17.6 33.3 22.5 2.4 4.2 -1.7 8.7 -0.4 -6.4 -7.9 -5.3 -2.3 Ethiopia 6.0 42.4 31.7 -10.5 3.4 4.6 4.6 4.5 9.4 26.9 2.2 8.7 5.9 5.8 5.4 4.5 -3.0 0.6 0.0 -4.0 -1.7 -1.4 -1.1 -0.9 Gabon -1.5 1.7 -0.1 2.8 9.7 6.2 3.8 0.6 5.1 2.4 6.6 5.3 8.0 6.0 8.2 10.0 -2.8 0.2 -2.1 -0.3 2.2 1.2 -0.7 -3.2 Ghana 1.7 24.6 30.1 9.5 18.6 6.0 8.6 8.0 0.0 21.0 47.7 15.8 13.0 7.0 6.2 6.0 -1.4 -2.3 -13.0 -6.1 -1.9 -2.4 -1.0 -1.0 Guinea -0.5 0.2 3.0 3.5 1.7 -6.8 3.4 3.2 4.5 27.2 27.7 30.0 -11.8 14.0 14.0 -0.1 -1.1 -7.9 -9.3 -12.5 7.1 -8.6 -6.5 0.8 Gambia -1.9 -1.3 17.6 4.2 0.1 1.5 1.6 -3.0 -0.1 7.6 7.2 13.3 8.0 6.2 6.2 5.6 -0.2 -3.5 1.1 -5.0 -4.0 -2.8 -2.8 -3.6 Guinea-Bissau 5.2 0.0 7.6 -20.1 -2.7 0.7 1.1 2.4 3.0 0.0 -3.4 -12.4 -10.0 5.5 3.5 -0.5 -0.7 0.0 2.4 0.3 2.4 -1.3 -0.7 0.5 Kenya 4.6 17.7 6.7 4.4 5.2 6.4 6.9 6.6 7.0 6.1 15.6 12.5 3.6 9.0 9.0 7.7 -1.2 2.0 -4.4 -4.3 -0.2 -2.4 -2.4 -2.0 Lesotho 10.1 6.2 1.5 5.6 1.5 2.7 3.0 2.7 3.1 9.7 4.6 2.8 6.0 5.0 4.2 2.8 0.6 -7.7 -4.4 -0.7 -6.0 -4.5 -3.5 -2.0 Madagascar 4.3 -9.4 22.0 10.0 0.2 0.8 1.7 1.2 7.1 -0.6 25.0 9.0 1.8 2.2 2.7 2.6 -1.3 -2.2 -4.0 -1.2 -0.8 -0.8 -0.8 -0.9 Mali 9.3 1.4 11.4 -4.0 2.8 6.0 4.0 4.0 1.6 0.6 7.7 -13.8 13.0 6.0 4.3 4.0 0.6 0.1 -0.1 4.7 -3.9 -0.8 -0.6 -0.5 Mozambique 15.2 7.4 18.2 21.0 5.7 9.2 10.4 16.3 4.7 6.5 20.2 25.4 6.1 9.6 8.4 9.2 2.0 -0.9 -4.2 -6.7 -1.7 -2.5 -1.4 0.5 Mauritania 0.8 18.7 19.1 -0.1 5.5 6.5 3.3 4.2 8.2 23.1 10.9 25.3 2.6 8.1 3.5 4.2 -4.3 -4.4 3.2 -18.8 1.1 -2.9 -1.0 -1.1 Mauritius 1.7 14.1 5.2 8.8 8.2 7.6 7.5 7.5 0.7 9.5 6.2 4.2 6.0 7.0 6.4 2.0 0.7 1.0 -1.2 1.9 0.6 -0.3 0.1 3.3 Malawi 21.6 23.2 4.6 1.0 11.0 4.8 5.1 5.2 11.7 19.2 -8.7 -6.1 -1.0 6.0 5.8 4.8 -0.5 -1.6 5.3 2.7 3.6 -0.6 -0.4 0.0 Namibia 4.2 16.7 -8.2 4.7 4.0 2.0 2.4 2.2 7.9 2.2 -0.4 15.7 1.7 3.3 3.7 4.2 -1.4 5.9 -3.6 -6.2 0.7 -1.0 -1.1 -1.5 Niger 9.0 19.7 -0.9 27.2 5.0 7.0 6.0 5.5 7.4 11.5 3.1 1.8 10.0 6.2 5.0 4.0 -1.5 -1.5 -1.7 5.0 -3.3 -1.2 -0.9 -0.5 Nigeria 3.9 53.5 32.4 2.7 4.2 5.0 6.3 6.2 16.9 12.7 22.7 -38.5 5.0 3.8 3.0 1.7 -1.4 11.2 6.1 14.1 1.0 1.6 2.3 2.5 Rwanda 11.5 5.6 47.7 34.3 5.0 7.0 7.8 6.6 9.1 11.2 14.4 22.9 7.0 9.0 6.0 5.0 -1.6 -2.7 0.4 -2.7 -1.7 -2.2 -1.0 -0.8 Sudan 13.5 5.1 -3.3 -28.4 2.9 5.0 3.0 3.2 5.3 6.8 -3.3 -45.3 -2.0 -2.0 -4.0 -4.0 0.3 -0.1 -0.1 2.3 0.7 1.0 0.9 0.9 Senegal 2.4 2.6 -4.3 4.5 3.5 5.1 5.1 5.1 3.8 -5.9 -0.9 5.0 5.0 5.9 6.5 5.5 -1.3 3.3 -0.7 -0.9 -1.2 -1.2 -1.4 -1.1 Sierra Leone 11.2 16.9 -2.0 17.8 26.4 25.0 12.8 8.8 10.0 30.6 63.8 28.3 9.0 5.0 7.8 8.0 -1.6 -6.0 -22.3 -12.3 -1.1 1.6 -1.6 -2.4 South Sudan 11.5 -1.6 -2.1 -73.9 55.0 12.0 19.5 15.0 7.0 9.9 8.2 -53.3 24.0 10.0 13.0 9.0 5.5 -3.7 -3.6 -29.5 9.5 1.7 3.7 3.5 Seychelles 6.6 6.9 -9.0 6.0 5.8 5.8 4.8 4.8 6.2 -15.4 17.0 5.5 7.5 9.8 9.9 7.0 -6.3 22.3 -20.9 -4.0 -6.4 -9.4 -10.5 -7.5 Swaziland 4.9 -8.3 19.7 -22.7 32.0 1.8 0.5 1.4 5.7 -8.7 5.2 -15.5 23.0 1.7 0.5 0.9 -0.5 1.6 6.8 -3.3 1.8 -0.1 0.0 0.2 Chad 15.9 17.8 8.9 8.9 18.0 15.0 14.0 0.1 -0.6 19.1 13.1 13.1 -17.0 -3.0 -2.5 20.0 -3.0 -1.4 -2.3 -2.7 15.9 8.2 7.8 -6.5 Togo 2.5 6.7 10.7 1.2 8.0 8.0 8.1 7.9 -0.4 0.3 8.4 6.9 10.0 10.2 10.0 10.0 1.5 2.5 -0.5 -3.6 -2.8 -3.1 -3.2 -3.6 Tanzania 11.2 18.5 27.5 7.2 5.2 5.7 5.5 5.6 13.3 14.4 47.9 10.3 6.5 6.0 5.0 4.8 -1.0 -0.6 -10.8 -3.1 -1.9 -1.4 -0.9 -0.8 Uganda 17.5 -23.7 0.5 15.6 -7.0 -4.2 4.2 4.2 9.9 0.2 11.5 8.6 -1.3 2.0 2.5 2.0 0.6 -6.9 -1.7 -0.2 -2.0 -0.9 0.3 0.4 South Africa 0.8 4.5 5.9 0.1 3.2 3.0 4.0 4.5 4.7 9.6 9.7 6.3 3.8 0.5 2.2 2.0 -0.7 -1.3 -1.1 -1.8 -0.3 0.7 0.5 0.7 Congo, Democratic Rep. -4.1 47.4 21.0 9.1 4.0 4.0 3.2 3.0 -2.9 41.7 5.4 -6.0 11.0 10.0 6.0 1.0 -2.2 -1.0 10.1 11.6 -4.3 -3.9 -2.0 1.5 Zambia 12.1 18.3 2.4 8.0 10.0 9.2 6.8 6.4 7.2 30.0 15.0 25.0 5.0 7.1 6.2 6.0 1.2 -0.9 -4.1 -5.8 2.3 1.2 0.6 0.5 Zimbabwe -9.5 57.0 17.0 -2.4 4.0 4.6 4.0 8.0 -1.9 33.7 25.8 -8.0 9.3 5.5 5.5 4.0 -4.1 -2.7 -12.1 6.0 -5.4 -2.4 -2.8 0.4 a. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 111 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.7 Exports (Constant 2010 U.S. dollars) Exports Net Exports Contribution to Growth 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f World 3.7 12.7 6.2 2.7 2.6 4.1 5.2 5.4 0.0 0.0 -0.1 0.1 0.0 -0.1 0.0 0.0 High Income Countries 2.9 11.3 5.8 2.6 2.2 3.6 4.7 4.9 0.1 -0.1 0.1 0.3 0.1 -0.2 0.0 0.0 Euro Area 2.2 11.4 6.6 2.6 1.3 3.2 4.4 4.7 0.1 0.6 0.9 1.4 0.6 0.3 0.3 0.3 OECD Countries 2.4 11.4 5.9 2.8 2.0 3.8 4.1 4.1 0.0 -0.1 0.2 0.4 0.2 0.1 0.1 0.0 Non-OECD Countries 6.2 11.9 4.3 2.6 3.7 3.9 4.6 4.8 0.8 -0.4 -1.1 -0.8 -1.2 -0.2 0.0 -0.5 Developing Countries 6.2 16.2 7.3 2.8 3.7 5.5 6.4 6.6 -0.1 0.1 -0.5 -0.5 -0.2 0.2 0.0 0.0 East Asia and the Pacific 9.0 22.2 5.3 3.2 4.9 7.3 7.5 7.5 0.4 1.6 -0.1 -0.5 -0.4 0.1 0.0 0.0 China 12.9 26.6 4.0 2.8 5.3 7.7 7.9 7.9 0.6 2.3 -0.1 -0.2 -0.6 -0.1 -0.1 -0.1 Indonesia 5.1 15.3 13.6 2.0 5.3 4.7 5.1 5.0 0.1 -0.1 0.3 -1.1 1.0 0.3 0.3 0.3 Cambodia 11.6 20.6 18.9 7.8 9.2 7.1 8.5 8.5 -0.3 0.7 0.5 -3.9 -2.5 -1.3 -1.8 -1.9 Lao People's Dem. Rep. 6.1 24.9 13.0 5.5 6.0 7.3 7.3 9.0 -1.0 6.6 -4.0 -7.3 -2.7 -2.3 -0.9 -0.3 Mongolia 7.4 6.8 28.1 -0.2 9.0 9.0 9.0 8.5 -0.6 -9.2 -13.2 -11.3 -0.8 -0.6 0.6 0.8 Malaysia 2.7 11.1 4.6 -0.1 -0.3 5.1 5.6 5.7 0.2 -1.1 -0.4 -3.7 -1.7 0.5 0.2 0.3 Philippines 2.6 21.0 -2.8 8.9 0.8 5.9 7.1 7.1 0.1 -0.8 -0.6 1.0 -1.2 0.1 0.0 -0.1 Papua New Guinea 5.1 39.0 13.0 6.0 6.0 8.0 20.0 5.0 0.9 18.0 -2.5 -41.4 3.9 -0.9 17.3 -2.2 Solomon Islands 10.8 44.9 11.0 0.0 3.0 3.0 5.0 5.0 -0.2 -4.9 -11.2 -7.5 -5.0 -3.0 -2.3 -1.7 Thailand 3.6 14.7 9.5 3.1 4.2 5.1 5.3 5.8 0.2 -2.3 -2.0 -2.1 1.5 3.6 0.6 0.3 Viet Nam 12.0 8.4 10.8 15.7 13.8 15.1 13.0 11.0 -0.9 -0.5 4.5 4.6 -0.1 -0.4 -1.0 0.7 Vanuatu 2.0 6.0 6.5 7.0 7.5 7.5 7.5 7.5 -0.7 0.6 0.0 -0.1 0.4 0.5 0.6 0.7 Europe and Central Asia 5.0 8.3 8.7 4.0 2.2 4.2 5.5 5.3 -0.1 -1.5 -1.1 0.9 -1.1 0.6 -0.4 -0.8 Albania 9.1 4.9 6.6 5.5 2.1 4.4 4.5 4.6 -3.0 3.4 -4.9 10.8 0.0 0.7 0.3 -0.2 Armenia 5.8 26.5 14.7 10.7 3.6 4.5 6.0 6.0 -1.4 -0.8 3.7 3.7 -1.3 -0.6 -0.4 -0.3 Azerbaijan 18.5 24.2 3.6 2.2 0.7 -1.1 1.2 2.7 3.7 10.8 -5.4 0.6 -3.3 -3.4 -1.8 -0.4 Bulgaria 5.7 14.7 12.3 -0.4 8.9 5.3 5.2 5.4 -1.6 6.0 1.8 -2.6 1.9 0.1 -0.5 -0.3 Belarus 4.7 7.7 28.4 -9.4 -3.0 -0.6 0.6 4.2 -2.0 -3.8 4.3 1.4 -4.3 -3.3 -2.5 -0.6 Georgia 4.3 15.1 12.0 9.0 5.0 9.7 5.4 6.8 -0.8 0.4 -0.3 -1.0 -0.8 0.8 -1.5 -1.3 Hungary 7.1 14.3 8.3 1.7 3.1 5.2 4.8 3.6 0.7 1.8 2.1 1.5 -0.4 -0.1 -0.5 -3.2 Kazakhstan 3.6 1.9 3.5 2.7 -4.0 6.2 9.3 8.3 1.6 0.6 -0.5 -4.3 -3.1 0.4 1.7 0.7 Kyrgyz Republic 5.0 -11.7 15.7 -11.3 8.1 7.5 6.5 6.5 -2.6 -0.8 -4.1 -22.8 2.7 -0.3 -1.5 0.4 Moldova 9.2 28.6 -1.0 1.9 11.9 6.6 6.9 6.6 -3.7 -4.3 -0.6 -1.1 0.0 -2.3 -3.0 -3.2 Macedonia, FYR -0.5 23.6 11.3 -0.4 4.4 5.2 8.0 8.0 -1.8 3.3 -3.9 -2.8 -3.8 -1.3 0.9 0.0 Romania 7.7 14.2 10.9 -3.1 12.0 5.6 5.4 6.4 -1.0 -0.2 -0.4 -0.8 3.3 -0.1 0.4 1.0 Turkey 4.7 3.4 7.9 17.2 4.3 6.6 6.3 5.4 -0.2 -4.2 -1.2 3.6 -1.5 1.2 -0.8 -1.2 Ukraine 0.4 3.9 4.3 -7.2 -8.8 -6.2 4.2 4.6 -0.4 -3.7 -6.8 -5.8 -0.4 3.2 0.4 -0.3 Uzbekistan 13.2 6.6 20.5 12.7 1.5 3.9 4.5 4.5 0.2 3.5 -1.0 1.5 -3.1 -1.9 -1.3 -0.7 Latin America and the Caribbean 2.0 9.5 7.1 3.1 1.1 1.9 4.4 5.5 -0.2 -1.9 -0.8 -0.4 -0.3 0.1 0.2 0.2 Argentina 3.7 14.4 4.9 -5.9 -5.3 -6.0 3.0 4.0 0.5 -1.8 -2.1 -0.2 -1.1 -0.4 0.3 0.3 Belize 4.3 14.4 3.8 4.5 0.7 2.5 4.0 4.6 1.6 1.9 -3.0 0.7 -0.8 0.2 0.8 0.9 Bolivia 5.4 9.9 5.9 11.9 4.0 4.5 5.0 5.0 1.2 0.3 -3.4 3.3 -2.4 -2.0 -1.2 -1.3 Brazil 5.3 11.5 4.5 0.5 2.5 0.5 5.0 6.0 0.2 -2.2 -0.7 0.0 -0.8 -0.1 0.1 0.1 Colombia 4.0 1.3 12.9 6.1 5.3 3.0 4.5 5.5 -0.5 -1.6 -1.7 -0.8 0.5 0.0 0.1 0.1 Costa Rica 3.6 5.5 6.1 8.5 3.6 4.0 5.0 5.6 0.3 -4.0 -1.6 0.3 -0.3 -0.2 0.1 0.3 Dominica -0.6 3.8 2.9 0.5 1.0 1.5 3.0 4.0 -1.0 7.9 7.9 -2.1 -2.0 -1.3 -1.1 -0.1 Dominican Republic 0.0 11.6 8.8 5.4 7.6 3.5 4.5 6.0 -0.3 -2.1 1.1 1.0 3.0 0.1 0.1 0.2 Ecuador 3.6 2.5 5.1 2.9 4.5 5.0 5.5 7.8 -1.1 -4.1 0.1 0.5 0.0 0.0 0.2 1.3 Guatemala 1.3 6.1 3.0 2.0 5.3 5.4 5.5 6.4 -0.4 -1.9 -1.8 0.0 -0.3 -0.2 -0.3 -0.1 Guyana 0.1 4.9 3.9 4.5 4.0 4.5 5.0 5.5 -0.6 -2.0 -1.7 -1.7 -0.7 -0.5 -0.1 0.2 Honduras 2.7 15.7 8.4 5.8 2.2 3.0 4.0 5.0 -0.3 -2.3 -4.2 0.1 0.4 -0.2 -0.4 -0.6 Haiti 3.9 -7.4 18.0 3.5 5.0 8.0 7.0 6.0 -1.4 -10.7 5.3 4.1 -2.1 -1.6 -1.7 -1.7 Jamaica -0.8 -7.5 -1.5 1.6 4.0 4.3 4.5 4.7 -0.8 0.1 -2.9 1.6 0.5 -0.1 -0.4 -0.9 St. Lucia 1.3 6.6 -7.3 4.3 2.0 1.0 3.5 4.5 -0.5 -4.9 -0.2 4.6 -0.7 -0.4 0.3 0.2 Mexico 1.1 20.5 8.2 5.9 1.4 3.4 4.2 5.6 -0.4 0.0 0.0 0.1 0.1 0.3 0.2 0.1 Nicaragua 6.9 12.2 8.0 13.4 3.1 4.0 5.5 6.0 0.6 1.2 -3.5 -0.6 3.1 1.1 0.1 -0.4 Panama 5.8 5.0 24.2 14.8 2.7 4.5 5.0 6.5 2.0 -12.7 -1.3 5.7 -3.9 -1.5 0.4 2.1 Peru 5.7 1.3 6.9 3.7 -0.9 2.0 5.0 7.0 0.6 -4.6 -0.8 -1.7 -1.1 -0.2 0.2 0.6 Paraguay 2.9 19.7 2.8 -7.0 18.0 6.5 6.3 6.0 -0.4 -1.4 -3.8 -1.9 5.3 0.2 0.3 0.4 El Salvadore 1.7 11.6 9.3 2.8 4.6 5.0 5.5 6.0 -0.3 -1.4 -2.2 0.4 -0.8 0.0 0.0 -0.1 St. Vincent and the Grenadines 1.8 2.2 -11.4 -2.6 4.0 2.0 4.0 5.0 -0.7 5.7 5.6 -4.5 -1.1 -0.5 -1.2 -0.5 Venezuela, Bolivarian Rep. of -2.8 -12.9 4.7 1.6 -4.2 1.0 2.9 3.5 -2.2 -3.6 -1.4 -4.3 1.2 1.3 1.0 0.8 Middle East and North Africa 4.1 7.0 -4.1 -6.6 -1.1 3.7 4.2 4.5 -0.7 0.8 -1.6 -3.0 -1.2 -0.1 -0.4 -0.5 Algeria 1.5 4.5 -2.0 -3.0 -7.3 7.0 3.5 3.6 -1.0 1.7 1.1 -2.3 -4.5 0.3 -0.8 -0.9 Egypt 11.9 -3.0 3.7 -4.6 0.9 2.4 4.1 4.4 0.0 -0.7 -3.4 -2.6 0.9 0.5 -0.7 -0.8 Iran, Islamic Rep. of 3.7 8.2 -2.4 -18.6 -7.2 3.0 4.3 4.3 -0.6 -0.1 -0.6 -4.0 -2.3 -0.2 0.0 0.0 Jordan 4.1 24.2 -5.0 -3.4 8.0 7.7 7.5 7.4 -2.7 12.0 0.0 -5.6 0.6 0.1 -0.2 -0.4 Lebanon 9.4 12.8 -2.3 -7.3 4.0 3.4 4.2 4.1 -1.6 1.1 1.1 -2.7 -1.9 -1.1 -2.1 -2.3 Morocco 4.5 16.6 2.1 2.9 8.9 3.1 6.5 6.0 -1.0 3.4 -1.5 0.1 0.6 -0.1 0.0 -0.1 Syrian Arab Republic 1.1 5.7 -40.1 -12.0 14.9 -8.6 -6.2 1.7 -1.3 -0.9 -16.6 -5.2 6.9 -2.5 -2.3 -1.4 Tunisia 2.8 4.8 -3.9 11.0 1.9 4.8 4.7 5.0 -0.2 0.3 3.1 -1.7 -1.0 0.5 0.5 0.5 Yemen -0.4 15.8 -5.0 3.1 -3.0 5.0 6.0 6.0 -0.9 7.2 -0.9 1.0 -2.8 -0.7 -1.2 -1.1 112 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Exports Net Exports Contribution to Growth 00-09a 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f South Asia 11.6 13.3 17.9 7.2 5.5 6.7 6.6 7.0 -0.2 -1.4 -0.7 -1.2 1.4 0.4 -0.3 -0.4 Bangladesh 9.0 0.9 29.3 7.8 3.5 6.8 7.3 7.5 -0.7 -2.4 -3.2 -0.4 -0.3 -1.2 -1.5 -1.5 India 11.9 19.6 15.6 5.0 8.4 6.0 6.7 7.0 -0.1 -1.6 -0.4 -1.4 1.6 0.6 -0.2 -0.3 Sri Lanka 1.6 8.8 11.0 0.2 1.2 6.1 6.5 6.8 -0.5 -1.8 -3.7 -0.1 -0.2 -0.7 -0.6 -0.5 Nepal -1.2 -10.4 -2.1 1.9 6.2 5.6 5.8 6.1 -2.3 -5.8 0.3 -2.7 -2.9 -1.7 -1.7 -1.6 Pakistan 5.8 15.7 2.4 -15.0 13.6 7.5 6.5 7.0 -0.3 1.0 -0.8 0.1 1.1 0.0 -0.4 -0.4 Sub-Saharan Africa 3.9 20.6 16.6 0.4 4.7 4.9 5.8 5.7 -0.7 3.1 0.5 1.1 0.1 0.3 0.7 0.8 Angola 44.7 43.5 34.3 3.1 2.0 5.0 6.8 6.9 1.6 20.4 8.5 -2.1 -0.2 0.1 1.5 1.7 Burundi 10.0 20.2 1.7 6.6 7.0 1.5 5.6 5.5 -2.7 -6.9 5.9 -0.9 -1.3 -1.5 -1.2 -0.8 Benin 3.3 3.0 11.1 7.0 -2.0 6.0 5.5 5.5 -0.3 0.2 -2.8 2.5 -1.5 -0.3 -0.4 -0.5 Burkina Faso 7.0 61.4 32.4 32.8 -2.0 -2.0 -1.0 1.0 -0.8 6.3 0.7 -7.0 -3.6 -3.2 -2.2 -1.0 Botswana -1.9 16.0 27.5 -7.0 6.0 6.0 5.0 5.0 -1.3 5.6 -0.5 -3.0 2.6 2.6 2.7 2.9 Cote d'Ivoire 3.7 3.6 2.0 7.1 5.2 5.0 6.0 5.0 0.2 -1.5 -0.9 1.6 0.0 -0.8 1.3 1.7 Cameroon 0.5 -1.6 0.3 -9.2 3.5 4.0 4.2 4.1 -1.5 -2.7 -2.0 -3.8 -0.1 0.0 0.0 0.0 Congo, Rep. 0.6 18.2 18.1 -2.7 6.0 9.0 9.5 8.8 -2.7 3.3 10.0 -2.3 7.1 9.0 8.6 7.2 Comoros 5.8 6.9 15.0 6.0 6.0 7.0 8.0 10.2 -0.7 -4.0 5.4 2.0 0.6 -0.4 -1.1 2.1 Cabo Verde 6.5 12.3 11.5 12.0 3.0 3.2 3.4 3.6 -3.0 -0.8 -0.6 -1.0 0.8 0.5 0.0 0.0 Eritrea 1.0 17.5 233.1 2.1 -17.2 6.3 19.6 -9.8 4.2 -1.7 8.7 -0.4 -6.4 -7.9 -5.3 -2.3 Ethiopia 6.0 42.4 31.7 -10.5 3.4 4.6 4.6 4.5 -3.0 0.6 0.0 -4.0 -1.7 -1.4 -1.1 -0.9 Gabon -1.5 1.7 -0.1 2.8 9.7 6.2 3.8 0.6 -2.8 0.2 -2.1 -0.3 2.2 1.2 -0.7 -3.2 Ghana 1.7 24.6 30.1 9.5 18.6 6.0 8.6 8.0 -1.4 -2.3 -13.0 -6.1 -1.9 -2.4 -1.0 -1.0 Guinea -0.5 0.2 3.0 3.5 1.7 -6.8 3.4 3.2 -1.1 -7.9 -9.3 -12.5 7.1 -8.6 -6.5 0.8 Gambia -1.9 -1.3 17.6 4.2 0.1 1.5 1.6 -3.0 -0.2 -3.5 1.1 -5.0 -4.0 -2.8 -2.8 -3.6 Guinea-Bissau 5.2 0.0 7.6 -20.1 -2.7 0.7 1.1 2.4 -0.7 0.0 2.4 0.3 2.4 -1.3 -0.7 0.5 Kenya 4.6 17.7 6.7 4.4 5.2 6.4 6.9 6.6 -1.2 2.0 -4.4 -4.3 -0.2 -2.4 -2.4 -2.0 Lesotho 10.1 6.2 1.5 5.6 1.5 2.7 3.0 2.7 0.6 -7.7 -4.4 -0.7 -6.0 -4.5 -3.5 -2.0 Madagascar 4.3 -9.4 22.0 10.0 0.2 0.8 1.7 1.2 -1.3 -2.2 -4.0 -1.2 -0.8 -0.8 -0.8 -0.9 Mali 9.3 1.4 11.4 -4.0 2.8 6.0 4.0 4.0 0.6 0.1 -0.1 4.7 -3.9 -0.8 -0.6 -0.5 Mozambique 15.2 7.4 18.2 21.0 5.7 9.2 10.4 16.3 2.0 -0.9 -4.2 -6.7 -1.7 -2.5 -1.4 0.5 Mauritania 0.8 18.7 19.1 -0.1 5.5 6.5 3.3 4.2 -4.3 -4.4 3.2 -18.8 1.1 -2.9 -1.0 -1.1 Mauritius 1.7 14.1 5.2 8.8 8.2 7.6 7.5 7.5 0.7 1.0 -1.2 1.9 0.6 -0.3 0.1 3.3 Malawi 21.6 23.2 4.6 1.0 11.0 4.8 5.1 5.2 -0.5 -1.6 5.3 2.7 3.6 -0.6 -0.4 0.0 Namibia 4.2 16.7 -8.2 4.7 4.0 2.0 2.4 2.2 -1.4 5.9 -3.6 -6.2 0.7 -1.0 -1.1 -1.5 Niger 9.0 19.7 -0.9 27.2 5.0 7.0 6.0 5.5 -1.5 -1.5 -1.7 5.0 -3.3 -1.2 -0.9 -0.5 Nigeria 3.9 53.5 32.4 2.7 4.2 5.0 6.3 6.2 -1.4 11.2 6.1 14.1 1.0 1.6 2.3 2.5 Rwanda 11.5 5.6 47.7 34.3 5.0 7.0 7.8 6.6 -1.6 -2.7 0.4 -2.7 -1.7 -2.2 -1.0 -0.8 Sudan 13.5 5.1 -3.3 -28.4 2.9 5.0 3.0 3.2 0.3 -0.1 -0.1 2.3 0.7 1.0 0.9 0.9 Senegal 2.4 2.6 -4.3 4.5 3.5 5.1 5.1 5.1 -1.3 3.3 -0.7 -0.9 -1.2 -1.2 -1.4 -1.1 Sierra Leone 11.2 16.9 -2.0 17.8 26.4 25.0 12.8 8.8 -1.6 -6.0 -22.3 -12.3 -1.1 1.6 -1.6 -2.4 South Sudan 11.5 -1.6 -2.1 -73.9 55.0 12.0 19.5 15.0 5.5 -3.7 -3.6 -29.5 9.5 1.7 3.7 3.5 Seychelles 6.6 6.9 -9.0 6.0 5.8 5.8 4.8 4.8 -6.3 22.3 -20.9 -4.0 -6.4 -9.4 -10.5 -7.5 Swaziland 4.9 -8.3 19.7 -22.7 32.0 1.8 0.5 1.4 -0.5 1.6 6.8 -3.3 1.8 -0.1 0.0 0.2 Chad 15.9 17.8 8.9 8.9 18.0 15.0 14.0 0.1 -3.0 -1.4 -2.3 -2.7 15.9 8.2 7.8 -6.5 Togo 2.5 6.7 10.7 1.2 8.0 8.0 8.1 7.9 1.5 2.5 -0.5 -3.6 -2.8 -3.1 -3.2 -3.6 Tanzania 11.2 18.5 27.5 7.2 5.2 5.7 5.5 5.6 -1.0 -0.6 -10.8 -3.1 -1.9 -1.4 -0.9 -0.8 Uganda 17.5 -23.7 0.5 15.6 -7.0 -4.2 4.2 4.2 0.6 -6.9 -1.7 -0.2 -2.0 -0.9 0.3 0.4 South Africa 0.8 4.5 5.9 0.1 3.2 3.0 4.0 4.5 -0.7 -1.3 -1.1 -1.8 -0.3 0.7 0.5 0.7 Congo, Democratic Rep. -4.1 47.4 21.0 9.1 4.0 4.0 3.2 3.0 -2.2 -1.0 10.1 11.6 -4.3 -3.9 -2.0 1.5 Zambia 12.1 18.3 2.4 8.0 10.0 9.2 6.8 6.4 1.2 -0.9 -4.1 -5.8 2.3 1.2 0.6 0.5 Zimbabwe -9.5 57.0 17.0 -2.4 4.0 4.6 4.0 8.0 -4.1 -2.7 -12.1 6.0 -5.4 -2.4 -2.8 0.4 a. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 113 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.8 GDP gap and potential growth (Constant 2010 U.S. dollars) GDP Gapa Potential GDP growthb c d 00-09 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f World 0.3 -0.6 -0.1 -0.3 -0.7 -0.9 -0.7 -0.4 2.7 2.4 2.6 2.7 2.8 2.9 3.1 3.2 High Income Countries 0.6 -1.3 -0.8 -0.7 -1.0 -0.9 -0.6 -0.3 1.9 1.1 1.3 1.5 1.6 1.8 2.0 2.2 Euro Area 0.9 -0.9 0.2 -0.9 -1.8 -1.4 -0.7 0.0 1.4 0.4 0.5 0.5 0.6 0.8 1.0 1.2 OECD Countries 0.5 -1.4 -0.9 -0.9 -1.1 -0.8 -0.3 0.1 1.8 1.0 1.2 1.4 1.5 1.7 1.9 2.0 Non-OECD Countries 0.9 -0.6 0.7 0.7 -0.3 -1.7 -2.8 -3.9 4.2 3.2 3.5 3.4 3.5 3.8 4.1 4.6 Developing Countries -0.6 1.3 1.7 0.7 -0.1 -0.7 -0.8 -0.6 5.3 6.0 5.9 5.7 5.6 5.5 5.4 5.4 East Asia and the Pacific -1.0 1.9 2.0 1.3 0.5 -0.2 -0.6 -1.0 7.7 8.6 8.2 8.2 8.1 7.8 7.6 7.4 Cambodia 0.3 -3.0 -2.3 -1.2 -0.1 0.7 0.9 1.3 7.5 6.3 6.3 6.1 6.2 6.4 6.7 6.7 China -1.0 2.5 2.7 1.5 0.5 -0.3 -0.9 -1.5 9.1 9.6 9.1 9.0 8.8 8.5 8.2 8.0 Indonesia -1.8 -0.2 0.3 0.8 0.9 0.8 1.1 1.6 4.1 5.9 5.9 5.9 5.7 5.4 5.3 5.0 Lao People's Dem. Rep. -1.2 -0.9 0.2 0.7 0.9 0.3 0.6 2.1 6.6 6.3 6.8 7.7 7.8 7.8 7.7 7.4 Malaysia -0.5 -0.7 -0.2 0.3 0.0 -0.1 0.0 0.1 4.2 4.8 4.6 5.1 5.1 4.9 4.9 4.9 Mongolia -1.0 -6.9 -0.4 1.0 1.9 1.9 1.7 1.2 6.3 7.8 9.9 10.8 10.7 10.1 9.0 8.0 Papua New Guinea -3.1 -0.5 0.3 0.5 -2.8 -1.1 10.4 7.3 2.9 7.7 8.2 8.4 7.9 8.1 7.6 7.0 Philippines -0.4 -0.7 -2.3 -1.2 0.1 0.7 1.5 2.0 4.2 5.6 5.3 5.6 5.8 6.0 6.1 5.9 Solomon Islands -3.8 1.9 3.6 2.1 -0.1 -1.0 -1.0 -0.4 1.9 7.3 7.2 6.4 5.3 4.4 3.5 2.8 Thailand -0.5 0.9 -2.4 0.2 -0.5 -1.5 -0.6 0.1 3.3 3.5 3.5 3.8 3.6 3.5 3.6 3.7 Vanuatu -1.0 0.4 -1.3 -2.0 -1.5 -0.4 0.9 2.4 3.2 3.8 2.9 2.6 2.2 2.0 1.9 1.7 Viet Nam -0.2 -0.6 -0.2 -0.2 -0.2 -0.2 -0.2 0.1 6.0 6.3 5.8 5.4 5.4 5.5 5.7 5.5 Europe and Central Asia 0.2 -1.6 1.0 -0.3 -0.2 -1.1 -0.9 -0.4 4.1 3.4 3.6 3.3 3.4 3.3 3.4 3.4 Albania 0.8 2.4 2.6 0.8 -1.9 -2.7 -2.4 -2.1 5.3 2.8 2.9 3.2 3.1 3.0 2.9 3.3 Armenia 4.5 -4.3 -3.4 -0.2 -1.2 -1.6 -3.2 -5.4 7.2 4.1 3.7 3.8 4.5 5.5 6.7 7.5 Azerbaijan -0.2 11.0 3.7 -0.2 -0.3 -0.7 -2.0 -3.1 12.7 7.4 7.1 6.2 5.9 5.7 5.5 4.7 Belarus 1.4 5.0 5.3 2.9 0.0 -4.3 -6.8 -9.8 6.1 5.9 5.2 4.0 3.9 4.0 4.2 4.4 Bulgaria 1.5 -2.6 -1.7 -2.0 -2.0 -1.2 0.1 1.7 4.1 1.3 0.9 1.0 0.9 0.9 1.1 1.2 Georgia 4.3 -1.2 0.3 0.7 -1.6 -2.6 -3.7 -4.5 6.0 6.4 5.4 5.5 5.7 6.1 6.7 6.9 Hungary 1.3 -3.0 -1.6 -3.2 -2.4 -0.6 0.8 2.0 2.2 0.1 0.1 -0.1 0.2 0.6 1.1 1.3 Kazakhstan 2.0 -1.5 0.0 -0.7 -0.5 -1.2 -1.2 -1.1 7.1 5.9 5.9 5.7 5.8 5.9 5.9 5.8 Kyrgyz Republic 2.0 -2.3 -0.2 -5.1 0.4 2.1 2.3 2.3 4.1 4.5 3.7 4.2 4.4 4.8 5.2 5.3 Macedonia, FYR 0.3 1.9 2.2 -0.6 -0.8 -1.0 -0.7 -0.2 2.7 2.2 2.5 2.6 3.3 3.3 3.2 3.2 Moldova 1.7 -1.0 1.5 -2.7 3.0 3.0 3.7 5.3 4.0 3.7 3.7 3.5 2.9 3.0 3.1 2.8 Romania 0.9 -2.9 -2.2 -3.8 -2.5 -1.9 -0.7 0.3 3.7 1.8 1.6 1.9 2.2 2.1 2.0 1.9 Turkey -1.5 -2.0 2.2 0.7 0.9 -0.2 -0.1 0.3 3.6 3.9 4.3 3.8 3.8 3.5 3.4 3.5 Ukraine 3.2 -3.2 0.8 0.2 -1.1 -6.5 -5.1 -2.8 3.5 1.0 1.0 0.9 1.4 0.4 1.0 1.6 Uzbekistan -1.0 0.0 0.4 1.2 2.0 2.1 2.0 2.2 6.1 8.3 7.8 7.3 7.2 7.0 6.8 6.5 Latin America and the Caribbean -0.7 0.7 1.4 0.8 0.2 -0.7 -0.5 0.3 3.1 3.5 3.5 3.2 3.0 2.9 2.8 2.7 Belize 1.5 -1.7 -2.1 0.3 -1.9 -2.5 -2.2 -1.8 4.1 2.8 2.8 2.9 2.9 3.1 3.4 3.6 Bolivia -1.0 0.0 0.0 0.4 2.2 2.9 2.9 2.7 3.3 4.6 5.2 4.8 4.6 4.5 4.3 4.0 Brazil -0.7 3.1 2.5 0.5 0.1 -1.0 -0.7 0.1 2.9 3.7 3.3 2.9 2.8 2.6 2.4 2.3 Colombia -0.7 -1.1 0.7 0.2 0.2 0.5 0.9 1.4 3.5 4.3 4.7 4.6 4.4 4.3 4.1 3.9 Costa Rica -0.4 -1.1 -0.6 0.4 -0.2 -0.6 -0.3 0.3 4.2 4.0 3.9 4.0 4.1 4.1 4.1 4.0 Dominica -1.0 5.1 2.7 -1.0 -2.1 -2.0 -1.0 0.3 2.0 2.7 2.0 2.0 1.8 1.7 1.6 1.5 Dominican Republic -0.8 2.6 2.1 1.2 0.9 0.6 0.5 0.7 4.8 5.4 5.0 4.8 4.4 4.3 4.3 4.2 Ecuador -0.6 -1.8 1.4 1.8 1.6 1.4 1.3 2.2 3.5 4.0 4.5 4.7 4.7 4.5 4.3 4.2 El Salvadore 0.4 -1.9 -1.4 -1.3 -1.4 -1.3 -0.8 -0.4 2.0 1.3 1.7 1.8 1.9 2.0 2.0 2.4 Guatemala -0.1 -1.0 0.0 -0.3 0.2 0.4 0.7 1.1 3.2 3.0 3.2 3.2 3.2 3.2 3.2 3.3 Guyana -0.7 -1.5 -0.3 0.4 1.4 2.2 2.2 1.7 1.3 2.9 4.2 4.1 3.8 3.6 3.6 4.0 Haiti -0.4 -6.5 -3.1 -1.0 1.7 3.1 3.5 3.3 1.0 1.7 1.9 0.7 1.5 2.2 2.7 3.2 Honduras 0.1 -0.9 -0.6 -0.1 -0.9 -1.4 -1.5 -1.2 3.7 2.9 3.5 3.4 3.4 3.5 3.5 3.7 Jamaica 0.1 -3.0 -1.5 -1.9 -1.8 -0.7 0.6 1.8 0.5 -0.3 0.1 0.0 0.1 0.0 0.0 0.5 Mexico 0.2 -2.7 -1.3 0.1 -1.2 -1.3 -0.4 0.9 2.2 2.2 2.5 2.5 2.4 2.5 2.6 2.6 Panama -1.9 -1.6 1.0 3.0 2.6 1.4 0.3 0.0 5.7 7.9 8.1 8.5 8.5 8.0 7.4 6.8 Paraguay -2.6 1.3 0.7 -4.8 3.8 4.3 4.7 5.3 2.5 4.9 5.0 4.5 4.4 4.3 3.9 3.5 St. Lucia -1.3 0.4 0.5 -0.3 -2.4 -2.7 -1.9 -0.4 2.1 1.6 1.2 1.2 1.2 1.3 1.3 1.2 St. Vincent and the Grenadines 1.7 -2.5 -3.8 -3.3 -3.2 -3.9 -3.8 -3.0 2.8 1.5 1.4 1.8 2.0 2.4 2.7 3.0 Venezuela, Bolivarian Rep. of -1.1 -2.3 -0.8 1.7 0.7 -1.0 -1.5 -0.9 2.9 2.9 2.6 3.1 2.3 1.8 1.5 1.3 Middle East and North Africa 0.2 4.0 2.8 -1.6 -3.9 -4.3 -4.2 -3.6 3.9 3.2 2.9 2.6 2.5 2.5 2.5 2.4 Algeria 1.4 -0.2 -1.2 -1.1 -1.6 -1.6 -1.6 -1.6 3.4 3.6 3.6 3.3 3.1 3.3 3.6 3.6 Egypt 0.0 2.9 1.4 0.2 -0.8 -1.4 -1.5 -1.6 4.2 3.9 3.5 3.4 3.3 3.3 3.2 3.2 Iran, Islamic Rep. of -0.3 4.9 5.1 -2.9 -6.4 -6.8 -6.7 -5.9 4.2 2.7 2.6 2.2 1.9 1.9 1.9 1.4 Jordan 0.5 3.7 2.2 0.6 -0.8 -1.9 -2.6 -2.5 5.3 4.4 4.1 4.3 4.3 4.3 4.2 3.9 Lebanon -1.4 6.9 5.3 2.5 -0.4 -2.2 -2.7 -2.4 3.6 5.0 4.6 4.2 3.8 3.4 3.0 2.7 Morocco -0.2 -1.0 -0.5 -2.1 -1.9 -3.0 -2.8 -2.4 4.1 4.7 4.5 4.3 4.2 4.2 4.2 4.1 Syrian Arab Republic 1.1 20.0 18.8 -3.1 -20.6 -22.8 -23.2 -18.1 2.6 -0.7 -2.4 -4.2 -5.4 -5.9 -5.7 -4.7 Tunisia 0.7 3.1 -1.8 -1.2 -1.6 -1.8 -1.5 -0.8 3.9 3.2 2.9 3.0 3.0 3.0 3.1 3.2 Yemen 0.3 9.1 -6.1 -5.1 -3.0 0.7 2.5 3.8 3.2 1.8 1.5 1.4 1.7 2.0 2.4 2.5 114 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) a b GDP Gap Potential GDP growth c d 00-09 2010 2011 2012 2013e 2014f 2015f 2016f 00-09 2010 2011 2012 2013e 2014f 2015f 2016f South Asia -0.6 1.7 2.3 0.9 -0.3 -0.8 -0.7 -0.1 6.0 6.8 6.7 6.4 6.0 5.8 5.8 5.7 Bangladesh -0.4 0.3 0.6 0.5 0.1 -0.2 -0.1 0.4 5.3 6.1 6.2 6.2 6.1 6.0 5.9 5.7 India -0.7 2.4 3.1 1.3 -0.2 -0.8 -0.7 0.0 6.4 7.3 7.1 6.7 6.2 6.0 6.0 5.9 Nepal -0.2 0.1 0.1 0.2 0.0 0.1 0.0 -0.1 3.6 4.5 4.2 4.1 4.2 4.3 4.4 4.4 Pakistan 0.1 -2.3 -2.5 -2.2 -1.8 -1.8 -1.7 -1.6 3.9 3.7 3.4 3.6 3.7 3.8 3.8 3.9 Sri Lanka -1.2 -1.3 0.1 -0.3 0.4 0.9 1.2 1.5 5.0 6.3 6.7 6.7 6.6 6.6 6.6 6.4 Sub-Saharan Africa 0.2 0.3 -0.1 -1.0 -1.0 -1.0 -0.8 -0.3 4.3 5.2 4.9 4.6 4.7 4.7 4.8 4.6 Angola -0.5 2.8 -0.7 -1.4 -3.7 -5.2 -5.6 -5.6 9.1 8.4 7.6 7.6 6.6 6.9 7.0 6.8 Benin 0.8 -0.7 -1.7 -0.4 -0.5 -0.3 -0.2 0.0 3.8 3.3 4.6 4.0 4.1 4.2 4.3 4.1 Botswana -0.4 -1.8 -1.2 -1.4 -1.4 -1.4 -1.4 -1.3 3.8 4.5 4.4 4.4 4.2 4.1 4.1 4.1 Burkina Faso 0.7 -1.8 -3.2 -0.5 -0.9 -1.5 -2.4 -3.2 5.5 6.5 5.7 6.6 7.0 7.3 7.4 7.2 Burundi -0.7 0.2 0.9 1.0 1.5 1.5 1.4 1.0 2.9 3.7 3.5 3.9 4.0 4.0 3.8 3.5 Cameroon 2.0 -0.8 -1.2 -1.3 -1.2 -1.0 -0.8 -0.6 3.2 4.1 4.5 4.7 4.6 4.7 4.9 4.8 Cabo Verde 2.0 2.7 2.5 0.9 -1.3 -2.7 -4.6 -5.2 6.5 5.1 4.7 4.1 4.0 4.0 4.2 4.6 Chad -1.0 4.9 0.4 -1.9 -4.8 -3.4 -2.5 -2.4 8.2 7.7 7.0 7.0 6.8 6.9 6.8 6.3 Comoros 0.7 -1.8 -2.0 -1.4 -0.7 0.0 0.5 1.0 1.7 3.0 2.4 2.4 2.5 2.8 3.0 2.7 Congo, Democratic Rep. -1.5 -1.6 -1.1 -0.1 0.5 0.9 0.8 0.7 3.9 6.7 6.3 6.1 5.8 5.5 5.1 4.6 Congo, Rep. 0.1 3.9 1.5 -0.4 -2.5 -2.0 -0.1 0.0 3.7 4.9 5.9 5.8 5.7 5.4 5.3 4.9 Cote d'Ivoire -0.8 -2.8 -10.4 -5.4 -1.3 1.4 2.7 2.5 1.2 3.8 3.4 3.7 4.2 4.5 4.5 4.3 Eritrea -3.5 -6.6 -1.0 2.9 2.8 2.6 2.0 1.3 1.2 1.0 2.5 3.0 3.7 3.7 3.6 2.7 Ethiopia -1.2 7.8 9.2 9.6 9.8 9.3 8.8 8.6 7.6 8.6 8.6 8.8 8.3 7.8 7.3 6.8 Gabon -2.2 -3.5 -0.3 1.7 1.6 1.4 1.3 1.0 1.6 3.5 3.6 3.6 3.6 3.7 3.9 4.0 Gambia 0.4 4.1 -3.8 -3.0 -2.0 -0.8 -0.1 0.0 3.3 4.4 3.6 4.4 5.0 5.2 5.3 4.9 Ghana -1.3 -2.7 3.5 3.0 2.4 -0.6 -1.0 -1.0 5.4 7.1 8.2 8.5 7.7 8.1 7.8 7.5 Guinea 1.4 -0.7 -0.6 -1.5 -2.4 -3.3 -3.7 -3.0 2.2 3.2 3.8 4.8 3.5 5.7 5.6 4.8 Guinea-Bissau -1.5 4.1 5.8 -3.5 -3.7 -1.9 0.1 2.5 1.0 2.2 3.0 2.4 0.5 0.6 0.7 0.2 Kenya -0.6 0.0 -0.2 -0.5 -0.7 -0.3 0.1 0.1 3.5 4.6 4.6 4.9 4.9 4.6 4.3 3.9 Lesotho -1.1 1.7 1.0 0.2 -0.6 -1.4 -1.9 -2.6 3.2 5.0 4.5 4.9 5.0 5.0 5.0 4.8 Madagascar 1.6 -3.2 -4.0 -4.0 -4.4 -4.0 -3.3 -2.6 3.1 2.4 2.7 3.0 3.3 3.6 3.7 3.8 Malawi 1.4 -7.6 -5.5 -5.3 -3.5 -2.2 -1.2 -0.5 3.7 4.2 2.1 1.7 2.3 2.9 3.6 4.0 Mali 2.2 0.7 -0.1 -3.5 -5.4 -3.5 -2.7 -2.3 5.3 4.7 3.5 3.1 3.9 4.5 5.0 5.2 Mauritania -0.8 -0.7 -1.5 0.4 1.1 1.1 1.0 1.0 4.8 2.9 4.9 5.5 4.9 4.5 3.7 3.0 Mauritius 0.3 0.2 0.2 -0.3 -0.9 -1.2 -1.2 -0.9 3.7 3.8 3.9 3.8 3.8 4.0 4.1 3.9 Mozambique 0.3 0.9 1.5 0.5 -0.9 -1.5 -1.6 -1.5 6.5 7.0 6.7 8.4 8.6 8.8 8.7 8.3 Namibia -0.3 -2.7 -1.3 -0.2 0.3 0.0 -0.3 -0.8 4.3 4.7 4.1 3.9 3.7 3.7 3.8 3.8 Niger 0.3 -2.1 -5.1 -0.2 -1.8 -1.0 -0.4 0.0 3.9 6.4 5.6 5.3 5.3 5.4 5.3 5.1 Nigeria -0.4 -0.7 -1.1 -0.8 -0.2 0.0 0.1 0.1 5.5 8.5 7.2 6.2 6.4 6.4 6.4 6.1 Rwanda 1.0 -2.4 -1.3 -0.3 -2.0 -1.6 -1.2 -1.1 7.2 9.0 7.0 6.9 6.8 6.8 7.0 7.3 Senegal 0.8 0.2 -1.3 -1.5 -1.6 -1.3 -0.9 -0.5 3.8 3.7 3.6 3.8 3.7 3.8 3.9 3.7 Seychelles -1.9 -0.7 3.0 1.9 1.6 1.4 0.7 0.5 2.4 2.8 4.0 4.0 4.0 3.9 3.6 3.0 Sierra Leone 1.3 -2.3 -7.2 -6.0 -5.4 -3.2 -2.8 -2.5 5.7 8.7 11.6 13.7 12.5 11.5 10.0 8.9 South Africa 0.6 -0.7 0.0 -0.3 -1.1 -1.7 -1.2 -0.1 3.2 3.0 2.8 2.8 2.7 2.6 2.6 2.4 South Sudan 2.1 14.5 14.4 -33.1 -16.5 -11.2 -5.6 0.4 5.0 1.5 1.7 -0.9 1.7 1.5 2.1 2.6 Sudan 1.3 6.9 1.8 -8.5 -5.4 -3.5 -2.6 -2.2 4.6 2.8 1.5 0.0 0.7 1.1 2.2 2.6 Swaziland 0.0 1.8 1.4 -0.8 -0.3 0.2 0.7 0.8 2.6 2.0 0.7 0.7 0.9 1.1 1.4 1.9 Tanzania 0.6 1.2 0.1 -0.5 -1.0 -1.1 -1.0 -0.8 5.9 6.9 7.6 7.6 7.5 7.3 7.1 6.9 Togo -1.0 -1.2 -0.3 0.7 1.2 1.4 1.4 1.6 2.0 4.2 3.9 4.6 3.5 3.5 3.4 3.2 Uganda 0.1 1.9 0.5 -0.9 -1.0 -1.1 -0.8 -0.5 6.4 6.9 6.5 6.1 6.7 7.0 6.6 6.5 Zambia -1.2 -0.8 -0.4 0.5 1.1 2.5 4.0 5.6 5.0 6.4 6.4 6.2 5.8 5.5 5.2 4.9 Zimbabwe -4.8 -6.1 1.6 4.5 5.2 5.2 4.6 4.6 -3.6 0.2 2.1 1.6 2.1 2.0 1.6 0.6 a. Gap between real gdp growth and potential gdp growth b. Potential GDP growth rate, year over year c. Simple average of the gap in the period 2000-2009 d. Compound average of potential growth during the period 2000-2009 Source: World Bank, WDI 115 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.9 Merchandise import growth (Constant 2010 U.S. dollars) Recent Yearsa Recent Quartersb Recent Monthsc 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar World 3.2 14.3 6.6 2.6 3.3 6.3 4.9 0.2 3.4 4.7 5.4 3.4 5.5 7.4 4.7 High Income Countries 1.8 12.3 4.8 0.5 1.6 1.2 6.5 0.7 3.6 2.8 6.4 3.6 2.3 3.2 2.8 Euro Area 2.1 8.4 4.8 -3.6 1.1 1.8 8.9 -0.3 3.1 7.2 2.7 3.1 5.2 8.6 7.2 OECD Countries 2.0 11.8 5.3 0.4 1.7 0.1 10.0 0.0 4.1 3.7 6.3 4.1 3.7 4.4 3.7 Non-OECD Countries 1.5 18.8 5.9 4.3 3.7 8.4 -3.9 1.5 3.3 1.8 7.5 3.3 2.8 2.7 1.8 Developing Countries 8.2 19.6 11.1 7.5 7.1 18.4 1.5 -1.0 3.0 9.8 3.2 3.0 13.5 18.0 9.8 East Asia and the Pacific 8.6 26.4 10.9 8.2 7.4 25.0 -7.4 0.5 6.2 4.9 8.0 6.2 17.6 19.8 4.9 Cambodia 5.1 12.7 8.0 18.8 .. .. .. .. .. .. .. .. .. .. .. China 12.5 25.5 10.7 8.5 8.5 28.9 -8.6 6.1 8.0 13.0 9.4 8.0 24.0 32.7 13.0 Indonesia 8.3 33.8 17.3 10.5 -0.9 -0.2 -7.0 -20.1 9.4 -0.6 21.1 9.4 21.4 -2.4 -0.6 Lao People's Dem. Rep. 8.0 35.8 .. .. .. .. .. .. .. .. .. .. .. .. .. Malaysia 1.5 25.9 2.6 7.2 6.9 47.5 -7.6 -4.1 8.2 1.0 9.5 8.2 4.6 6.2 1.0 Mongolia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Papua New Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Philippines 1.6 20.1 0.1 1.3 3.4 -15.3 9.2 73.8 -21.7 .. -3.3 -21.7 22.2 20.2 .. Solomon Islands .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Thailand 5.8 37.6 17.9 5.5 3.6 12.5 -8.0 -31.4 -5.5 -37.8 -12.4 -5.5 -19.2 -33.4 -37.8 Vanuatu .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Viet Nam 13.0 14.4 11.6 12.3 .. 35.7 6.7 11.6 .. .. .. .. .. .. .. Europe and Central Asia 10.7 14.4 17.4 7.5 9.9 19.5 23.4 0.7 12.5 11.4 13.6 12.5 31.4 16.5 11.4 Albania 12.6 -7.4 9.8 -7.8 0.9 0.7 10.6 10.3 34.0 .. 10.5 34.0 32.7 39.5 .. Armenia 11.0 9.9 -2.1 4.5 6.9 24.0 -21.1 15.3 54.1 -28.1 56.5 54.1 26.8 -15.2 -28.1 Azerbaijan 15.1 2.3 33.3 24.1 .. .. .. .. .. .. .. .. .. .. .. Belarus 8.9 11.0 14.3 3.0 -6.1 7.7 -7.3 8.9 -21.1 -16.1 -19.4 -21.1 -18.5 -11.6 -16.1 Bulgaria 5.9 5.4 12.8 24.0 3.2 13.2 -1.0 22.0 -17.6 5.3 -1.2 -17.6 -5.1 -0.1 5.3 Georgia 12.4 11.8 18.3 .. .. .. .. .. .. .. .. .. .. .. .. Hungary 7.9 15.8 8.9 5.0 9.6 9.1 20.3 -11.4 -4.4 28.3 -8.5 -4.4 1.3 18.8 28.3 Kazakhstan 16.0 2.4 7.6 28.7 6.9 22.7 17.0 -18.5 13.1 -40.7 7.7 13.1 -4.9 -23.6 -40.7 Kyrgyz Republic 10.3 21.2 25.7 12.7 11.2 -16.9 39.5 16.5 4.9 -50.7 10.2 4.9 5.8 -15.2 -50.7 Macedonia, FYR 5.7 -0.4 12.9 -5.4 4.4 1.6 11.6 -8.5 23.6 .. 1.3 23.6 .. .. .. Moldova 12.9 11.4 23.7 1.8 7.4 37.8 0.5 3.5 -17.5 .. -20.0 -17.5 .. .. .. Romania 7.8 13.7 5.4 1.3 2.6 9.3 -4.8 28.2 -3.1 20.3 1.1 -3.1 4.2 20.1 20.3 Turkey 15.1 18.1 26.5 8.2 14.3 14.0 52.3 0.0 34.2 18.5 35.7 34.2 74.6 27.7 18.5 Ukraine 9.4 25.7 21.2 -2.9 .. .. .. .. .. .. .. .. .. .. .. Uzbekistan 12.9 -2.2 5.6 10.2 .. .. .. .. .. .. .. .. .. .. .. Latin America and the Caribbean 3.3 19.8 9.3 8.1 9.7 8.8 14.9 9.2 -4.8 28.5 -5.3 -4.8 1.9 29.9 28.5 Argentina 16.6 46.3 29.2 2.9 25.0 18.2 48.2 11.0 16.1 160.2 29.0 16.1 26.6 82.0 160.2 Belize 1.2 0.8 6.6 8.5 .. .. .. .. .. .. .. .. .. .. .. Bolivia 7.0 18.6 29.4 6.0 14.3 17.8 0.0 10.5 34.4 12.8 17.9 34.4 25.6 74.9 12.8 Brazil 5.0 21.5 3.9 14.4 19.9 20.8 24.5 38.7 -14.7 44.8 -20.8 -14.7 6.0 70.2 44.8 Colombia 6.6 17.5 20.5 10.8 2.6 17.2 -0.1 -3.4 16.4 .. 20.6 16.4 15.1 27.7 .. Costa Rica 3.4 14.5 7.7 9.9 4.4 -5.6 23.2 -11.9 2.9 -1.5 14.4 2.9 -5.6 -7.4 -1.5 Dominica 1.9 -4.9 -8.4 -6.5 -0.5 28.6 -33.9 -7.5 32.5 .. 45.6 32.5 .. .. .. Dominican Republic -0.4 18.3 -4.0 -1.1 .. .. .. .. .. .. .. .. .. .. .. Ecuador 10.5 21.2 5.4 -1.5 11.5 37.1 4.9 30.5 -33.8 3.3 -16.0 -33.8 -40.2 -19.5 3.3 El Salvadore 1.4 8.9 5.2 4.5 .. 17.1 29.2 -16.8 .. .. .. .. .. .. .. Guatemala 4.9 14.4 8.5 4.1 -3.7 -22.6 14.2 -3.2 0.5 15.2 32.8 0.5 3.5 -0.7 15.2 Guyana 3.0 15.3 17.0 -1.8 .. .. .. .. .. .. .. .. .. .. .. Haiti 4.5 39.1 -10.3 -8.1 .. -13.5 176.4 .. .. .. .. .. .. .. .. Honduras 5.5 10.1 13.9 5.3 -0.6 0.8 -11.7 28.4 5.3 .. 21.0 5.3 -2.3 -15.9 .. Jamaica 4.7 5.3 8.0 -5.1 4.1 145.3 -45.5 -17.6 8.1 .. 9.8 8.1 -8.8 .. .. Mexico 0.3 23.3 8.7 4.7 3.0 -3.1 16.8 -8.5 -2.8 3.4 -4.8 -2.8 -1.9 5.7 3.4 Nicaragua 4.1 14.7 12.5 13.2 -1.5 -31.9 40.8 1.5 -5.1 .. -13.7 -5.1 .. .. .. Panama 6.4 13.4 13.0 12.6 .. .. .. .. .. .. .. .. .. .. .. Paraguay 10.7 39.6 11.8 -8.6 .. .. .. .. .. .. .. .. .. .. .. Peru 4.8 19.2 11.3 6.2 6.0 8.8 14.1 17.9 -8.3 10.0 5.0 -8.3 -12.8 -5.4 10.0 St. Lucia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. St. Vincent and the Grenadines .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Venezuela, Bolivarian Rep. of 7.2 -22.0 1.6 37.2 0.2 -8.0 -49.2 19.8 -17.6 .. -24.2 -17.6 .. .. .. Middle East and North Africa 8.9 8.4 7.9 7.1 .. .. .. .. .. .. .. .. .. .. .. Algeria 12.9 -3.9 3.7 11.5 .. .. .. .. .. .. .. .. .. .. .. Egypt 9.1 11.8 -2.3 19.8 -12.0 18.8 -35.9 -25.8 47.3 .. -6.3 47.3 71.0 .. .. Iran, Islamic Rep. of 10.0 27.9 29.8 -1.4 .. .. .. .. .. .. .. .. .. .. .. Jordan 4.8 -10.2 -2.7 8.9 3.8 -9.7 1.5 6.7 -44.7 .. -29.7 -44.7 -28.0 -21.5 .. Lebanon 7.0 -6.4 -4.8 7.8 .. .. .. .. .. .. .. .. .. .. .. Morocco 7.9 3.9 10.3 -0.7 5.5 -19.3 29.7 12.3 -11.7 .. 5.0 -11.7 -12.7 .. .. Syrian Arab Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tunisia 5.7 11.6 -3.4 3.5 1.2 13.7 -5.6 0.8 -12.5 .. -9.3 -12.5 17.6 .. .. Yemen 11.6 4.8 -14.0 35.1 .. .. .. .. .. .. .. .. .. .. .. 116 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Recent Yearsa Recent Quartersb Recent Monthsc 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar South Asia 10.4 19.1 10.3 4.5 0.1 4.0 -1.5 -24.4 -7.4 14.4 -14.7 -7.4 -2.2 2.4 14.4 Bangladesh .. 21.2 15.0 -2.1 7.4 39.0 2.4 23.3 26.7 .. 15.6 26.7 34.3 25.4 .. India 12.0 20.8 11.0 5.8 -0.9 3.3 -5.3 -32.1 -6.6 13.3 -19.5 -6.6 -3.3 3.9 13.3 Nepal 3.0 29.3 23.4 27.7 11.3 -44.8 60.6 84.0 -11.9 .. 23.0 -11.9 .. .. .. Pakistan 5.0 4.7 -6.0 -3.9 2.5 0.9 18.3 5.4 -30.1 41.8 0.5 -30.1 0.2 1.9 41.8 Sri Lanka 2.7 15.5 23.9 0.5 3.4 -2.0 39.4 28.2 -25.4 .. 2.2 -25.4 .. .. .. Sub-Saharan Africa 11.0 3.2 10.5 5.2 .. .. .. .. .. .. .. .. .. .. .. Angola 20.3 -16.1 2.2 24.8 .. .. .. .. .. .. .. .. .. .. .. Benin 23.4 16.3 27.7 -29.3 .. .. .. .. .. .. .. .. .. .. .. Botswana 5.7 16.5 12.5 11.5 -11.7 -13.3 -56.3 54.0 31.1 .. 393.9 31.1 .. .. .. Burkina Faso 10.9 4.9 3.0 10.7 .. .. .. .. .. .. .. .. .. .. .. Burundi 7.8 21.2 35.2 2.5 9.1 81.0 6.0 -24.9 -19.3 .. -30.6 -19.3 1.0 25.8 .. Cameroon 6.1 3.0 11.2 8.8 .. .. .. .. .. .. .. .. .. .. .. Cabo Verde 9.2 1.2 28.1 -23.5 .. .. .. .. .. .. .. .. .. .. .. .. Chad .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Comoros 7.0 11.0 -2.1 7.8 .. .. .. .. .. .. .. .. .. .. .. Congo, Democratic Rep. 15.4 12.1 19.8 8.3 .. .. .. .. .. .. .. .. .. .. .. Congo, Rep. 17.3 -7.6 22.1 -0.1 .. .. .. .. .. .. .. .. .. .. .. Cote d'Ivoire 6.2 9.6 -32.1 35.4 .. .. .. .. .. .. .. .. .. .. .. Eritrea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ethiopia 14.8 19.9 3.3 31.0 .. .. .. .. .. .. .. .. .. .. .. Gabon 2.9 8.7 19.9 5.3 .. .. .. .. .. .. .. .. .. .. .. Gambia 6.2 -3.1 23.6 -7.3 .. .. .. .. .. .. .. .. .. .. .. Ghana 10.7 20.8 19.5 23.0 .. .. .. .. .. .. .. .. .. .. .. Guinea 18.1 7.2 18.4 12.2 .. .. .. .. .. .. .. .. .. .. .. Guinea-Bissau 7.7 -20.0 17.7 2.1 .. .. .. .. .. .. .. .. .. .. .. Kenya 9.7 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Lesotho 4.9 17.5 -1.3 8.6 -14.9 -12.2 -37.7 -2.9 3.2 .. 6.9 3.2 .. .. .. Madagascar 12.7 -12.4 3.6 7.3 .. .. .. .. .. .. .. .. .. .. .. Malawi .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mali .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritania 9.3 15.1 22.1 13.2 .. .. .. .. .. .. .. .. .. .. .. .. Mauritius 2.0 6.3 6.2 2.7 .. .. .. .. .. .. .. .. .. .. .. Mozambique 10.7 -6.8 86.8 11.6 .. .. .. .. .. .. .. .. .. .. .. Namibia 8.9 -0.9 1.6 .. .. .. .. .. .. .. .. .. .. .. .. Niger 14.4 -5.5 -11.0 -3.2 .. .. .. .. .. .. .. .. .. .. .. Nigeria 19.4 6.2 12.9 -4.3 .. .. .. .. .. .. .. .. .. .. .. Rwanda 16.0 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Senegal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Seychelles 6.9 2.5 3.8 10.5 .. .. .. .. .. .. .. .. .. .. .. Sierra Leone .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. South Africa 6.1 16.3 10.7 2.4 2.6 2.9 21.9 -3.3 -7.9 -10.5 1.9 -7.9 -5.3 -7.6 -10.5 South Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sudan 16.9 -0.1 -17.8 1.7 9.5 40.7 47.0 -36.6 -23.9 .. -35.0 -23.9 .. .. .. Swaziland .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tanzania 12.7 19.4 22.9 7.2 .. 37.3 -28.0 73.3 .. .. 29.6 .. .. .. .. Togo .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Uganda 9.1 11.1 3.9 5.7 .. -12.5 47.5 1.0 .. .. .. .. .. .. .. Zambia 9.4 26.7 15.0 10.9 .. .. .. .. .. .. .. .. .. .. .. Zimbabwe 2.3 29.3 9.1 -0.7 .. .. .. .. .. .. .. .. .. .. .. a. Year over Year percent growth b. Quarter over quarter percent growth, seasonally adjusted annualized rate c. Three month over three month moving average of seasonally adjusted annualized growth rate d. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 117 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.10 Merchandise export growth (Constant 2010 U.S. dollars) Recent Yearsa Recent Quartersb Recent Monthsc 2012 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar World 3.7 13.3 2.2 0.9 10.5 1.6 8.7 16.5 35.6 1.3 -14.4 12.9 -21.2 -14.4 -3.7 3.7 12.9 High Income Countries 3.3 12.1 4.1 3.7 3.9 11.6 -7.6 -3.1 33.2 6.4 -8.6 -11.3 -16.9 -8.6 -5.4 -8.0 -11.3 Euro Area .. 3.5 19.1 -11.8 8.0 -16.0 25.6 25.4 -8.1 12.2 22.0 .. 21.9 22.0 7.8 10.6 .. OECD Countries 2.0 12.0 6.7 1.8 2.2 -1.3 -3.7 4.0 7.8 2.0 3.4 0.6 2.5 3.4 0.6 1.0 0.6 Non-OECD Countries 5.1 11.7 1.2 6.2 5.9 27.6 -11.4 -10.5 68.6 11.8 -19.8 -22.6 -33.1 -19.8 -11.8 -17.2 -22.6 Developing Countries 4.4 15.3 -1.0 -3.7 23.2 -15.1 47.1 58.2 39.5 -6.3 -23.2 64.4 -27.6 -23.2 -0.8 25.7 64.4 East Asia and the Pacific 9.8 15.8 1.4 4.8 5.7 -1.5 4.9 18.6 -10.9 1.0 15.2 -17.1 15.6 15.2 17.9 -11.6 -17.1 Cambodia 13.6 5.1 6.0 22.0 .. 156.8 22.3 .. .. .. .. .. .. .. .. .. .. China 12.6 27.1 4.3 3.6 6.0 -0.7 2.6 20.1 -13.2 1.4 16.4 -21.6 15.8 16.4 21.3 -13.0 -21.6 Indonesia 8.6 -18.5 -19.4 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Lao People's Dem. Rep. 8.8 17.0 21.3 16.4 .. -34.6 55.2 .. .. .. .. .. .. .. .. .. .. Malaysia 2.0 19.6 2.3 -0.1 -0.8 -16.4 15.6 7.1 -5.8 -10.5 -0.7 16.7 -3.0 -0.7 5.2 -1.2 16.7 Mongolia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Papua New Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Philippines 1.2 -0.6 -5.7 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Solomon Islands .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Thailand 9.0 -6.8 -5.4 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Vanuatu .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Viet Nam 14.9 16.2 17.9 25.5 19.3 12.2 20.3 21.3 17.8 15.4 25.6 1.3 46.7 25.6 -4.1 -8.0 1.3 Europe and Central Asia 9.6 -1.4 5.8 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Albania 11.8 29.4 15.4 2.5 19.8 41.3 8.9 -2.0 37.7 30.3 21.6 -18.7 10.1 21.6 3.0 9.5 -18.7 Armenia 4.2 38.8 13.8 10.8 3.2 20.2 43.0 -13.5 -3.9 51.1 -11.0 -8.6 -7.0 -11.0 -2.5 -32.0 -8.6 Azerbaijan .. -1.2 -0.9 -6.6 -1.2 -5.3 46.7 -17.6 -18.6 6.3 33.4 .. 27.7 33.4 .. .. .. Belarus 8.3 14.0 39.2 12.9 -13.8 -43.7 -16.0 3.1 -21.8 2.5 -8.6 18.5 -15.4 -8.6 6.3 11.9 18.5 Bulgaria 14.3 -22.2 2.9 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Georgia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Hungary 10.2 -10.5 -6.1 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Kazakhstan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Kyrgyz Republic 4.4 -10.0 4.7 -19.4 .. -16.8 102.2 -48.0 .. .. .. .. .. .. .. .. .. Macedonia, FYR .. 17.5 22.2 -7.9 8.1 -7.5 22.4 18.5 -8.3 16.8 28.5 28.5 -0.9 28.5 51.6 59.4 28.5 Moldova 7.1 14.2 30.4 -0.3 14.2 -37.1 14.1 109.3 -25.7 31.3 -14.5 8.4 -11.0 -14.5 -1.3 -1.8 8.4 Romania 13.9 -10.5 0.3 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Turkey 10.9 7.6 7.6 14.7 1.4 14.4 -17.9 4.4 -1.6 8.7 -3.1 34.1 6.0 -3.1 6.7 11.8 34.1 Ukraine 6.2 20.4 18.5 -0.6 .. -5.9 27.2 .. .. .. .. .. .. .. .. .. .. Uzbekistan 5.9 -2.5 -16.2 8.9 .. 112.3 -7.1 .. .. .. .. .. .. .. .. .. .. Latin America and the Caribbean 2.9 16.3 -3.2 -7.7 32.6 -19.0 74.4 81.8 63.5 -9.3 -32.2 101.4 -38.3 -32.2 -5.2 40.8 101.4 Argentina 2.6 12.7 1.9 -5.8 8.5 16.2 4.5 5.6 53.4 -8.3 -14.7 -24.3 -1.4 -14.7 -27.1 -40.1 -24.3 Belize -4.1 3.1 -2.3 -0.8 .. -27.9 12.3 .. .. .. .. .. .. .. .. .. .. Bolivia 8.8 7.6 11.4 39.8 8.7 -4.5 76.7 -20.8 7.5 -18.6 6.9 55.0 -10.9 6.9 3.2 41.2 55.0 Brazil 6.4 -3.9 -1.6 16.4 14.2 24.8 16.4 -24.6 52.1 43.4 16.0 -11.8 14.7 16.0 13.1 4.9 -11.8 Colombia 10.0 -8.7 -21.2 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Costa Rica 1.8 3.0 0.7 11.7 3.7 -0.7 7.5 1.9 -1.2 12.4 9.6 -27.0 7.1 9.6 -12.6 -15.2 -27.0 Dominica -6.9 4.3 -28.3 24.0 9.6 -30.9 7.4 -0.7 59.0 45.0 -50.2 .. -67.0 -50.2 .. .. .. Dominican Republic -3.5 14.2 10.4 8.7 .. 7.0 26.7 .. .. .. .. .. .. .. .. .. .. Ecuador 8.9 -8.4 -14.8 .. .. .. .. .. .. .. .. .. .. .. .. .. .. El Salvadore .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guatemala 0.9 5.3 5.4 4.6 7.3 19.8 8.3 -11.5 27.8 -2.3 15.8 -19.8 9.8 15.8 12.2 -7.7 -19.8 Guyana -2.5 -2.9 4.6 27.0 .. 211.3 13.1 -51.2 41.8 207.5 .. .. .. .. .. .. .. Haiti 9.2 -2.4 7.3 5.8 .. 16.2 69.6 -36.6 23.7 .. .. .. .. .. .. .. .. Honduras -0.8 19.7 9.9 11.2 0.5 50.8 -26.6 -13.9 -1.0 30.2 31.5 .. 32.2 31.5 -3.2 -35.6 .. Jamaica -1.5 -19.0 7.7 21.4 -1.1 25.8 45.6 -17.8 -31.6 4.9 3.6 .. -6.4 3.6 29.6 .. .. Mexico 0.2 15.8 2.6 8.7 2.7 -7.8 -2.2 -2.8 11.4 10.6 3.6 9.0 4.4 3.6 -1.4 4.1 9.0 Nicaragua 4.4 128.9 2.4 15.5 .. 45.1 25.0 -28.7 -26.3 41.2 .. .. .. .. .. .. .. Panama -2.6 -17.6 -3.6 5.2 5.6 33.1 34.2 -27.4 -0.9 45.1 -21.7 -22.1 -3.7 -21.7 -18.0 -16.8 -22.1 Paraguay 2.9 17.6 -3.5 -9.5 36.0 -22.0 86.2 96.6 67.8 -11.5 -35.3 116.9 -41.6 -35.3 -5.7 46.0 116.9 Peru 8.5 20.7 13.7 -1.5 -6.3 24.3 0.3 -16.7 -13.1 16.2 -5.0 -22.1 7.0 -5.0 -23.8 -6.9 -22.1 St. Lucia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. St. Vincent and the Grenadines .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Venezuela, Bolivarian Rep. of -12.9 -21.7 -12.3 -21.3 -17.2 -34.9 -23.8 -14.2 61.2 -77.3 166.2 .. 10.5 166.2 481.9 398.3 .. Middle East and North Africa 3.0 8.4 0.5 -15.3 .. -34.5 44.5 .. .. .. .. .. .. .. .. .. .. Algeria -0.3 6.7 0.1 -24.0 .. -9.3 27.1 .. .. .. .. .. .. .. .. .. .. Egypt 12.4 6.4 -1.6 -3.3 -2.4 45.0 4.8 0.1 -25.0 -13.5 6.5 .. 13.9 6.5 5.4 -2.8 .. Iran, Islamic Rep. of 3.4 6.3 1.4 -20.8 .. -73.2 131.3 .. .. .. .. .. .. .. .. .. .. Jordan 10.3 4.8 3.3 -0.8 3.6 -2.2 -12.1 15.3 -9.0 23.4 12.3 15.8 34.1 12.3 21.5 -29.1 15.8 Lebanon 12.7 11.7 -12.2 3.8 -6.9 104.3 -7.2 10.1 -13.9 -48.8 -40.6 -13.3 -40.2 -40.6 -29.8 -29.7 -13.3 Morocco 4.0 21.5 10.3 1.1 3.8 19.9 -2.7 0.9 15.6 -3.9 16.3 17.5 30.0 16.3 24.1 2.2 17.5 Syrian Arab Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tunisia 6.7 7.0 -3.1 -3.7 1.8 -9.7 27.2 16.8 -19.5 3.2 -20.2 .. 15.0 -20.2 20.8 .. .. Yemen -6.0 39.0 -9.9 -11.3 .. 79.5 0.8 .. .. .. .. .. .. .. .. .. .. 118 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Recent Yearsa Recent Quartersb Recent Monthsc 2012 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar South Asia 10.1 23.2 20.5 -0.3 8.0 -15.9 11.0 44.6 -20.9 39.0 -7.3 5.4 30.3 -7.3 -15.4 -8.9 5.4 Bangladesh .. 23.4 16.2 4.9 13.8 -27.6 56.8 17.0 -15.8 56.7 8.6 .. 132.9 8.6 34.5 -20.8 .. India 11.2 24.2 22.2 -0.5 7.7 -15.9 8.5 54.0 -24.2 36.9 -9.1 5.9 22.7 -9.1 -20.5 -8.8 5.9 Nepal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Pakistan 3.9 18.3 8.4 -1.2 5.1 3.3 4.0 -8.0 6.9 54.3 -21.7 15.9 25.7 -21.7 -8.8 10.0 15.9 Sri Lanka .. 12.0 17.4 -5.2 7.4 -27.3 0.1 21.6 17.3 20.0 53.4 -0.1 62.3 53.4 11.9 -18.1 -0.1 Sub-Saharan Africa 1.5 15.9 2.9 5.5 -6.3 -14.3 -10.3 -9.8 15.5 -18.9 -16.6 .. -12.6 -16.6 .. .. .. Angola 8.7 5.0 -5.5 10.7 0.6 -48.9 34.9 20.9 33.0 -46.4 -30.6 .. -20.2 -30.6 15.1 2.4 .. Benin 3.1 42.5 -0.7 26.5 .. 76.3 -42.8 .. .. .. .. .. .. .. .. .. .. Botswana -0.8 21.1 15.6 6.4 39.8 53.8 -8.3 134.2 15.2 66.5 7.1 -77.8 345.1 7.1 -30.7 -75.9 -77.8 Burkina Faso 8.4 1.3 -7.0 27.6 .. -64.4 -23.0 .. .. .. .. .. .. .. .. .. .. Burundi 8.2 -17.3 -42.9 39.7 -1.1 -69.5 176.6 -41.4 6.0 -92.0 4762.5 .. -6.2 4762.5 10086.3 59199.3 .. Cameroon 0.1 -1.9 -4.4 10.2 .. 5.2 64.2 .. .. .. .. .. .. .. .. .. .. Cabo Verde 11.5 22.6 29.0 13.6 .. .. 191.0 -48.4 .. .. .. .. .. .. .. .. .. .. Chad .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Comoros 3.7 6.8 43.2 51.5 .. 99.9 16709.0 .. .. .. .. .. .. .. .. .. .. Congo, Democratic Rep. 1.9 59.7 6.5 1.7 .. -45.2 84.8 .. .. .. .. .. .. .. .. .. .. Congo, Rep. 6.1 25.4 -11.2 -3.8 .. -46.1 92.6 .. .. .. .. .. .. .. .. .. .. Cote d'Ivoire 2.5 -16.5 -5.6 6.5 .. 2.4 -8.0 .. .. .. .. .. .. .. .. .. .. Eritrea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ethiopia 13.4 -5.6 -6.8 29.6 .. -57.1 101.1 .. .. .. .. .. .. .. .. .. .. Gabon -4.3 18.6 11.5 2.5 .. 11.1 -25.9 .. .. .. .. .. .. .. .. .. .. Gambia -4.4 14.9 54.7 -4.0 .. 362.9 321.8 .. .. .. .. .. .. .. .. .. .. Ghana 0.8 13.6 33.7 1.6 17.3 -34.3 60.4 13.6 48.0 5.3 51.7 .. 14.4 51.7 .. .. .. Guinea 2.8 44.4 -18.1 -11.0 .. -57.6 23.9 .. .. .. .. .. .. .. .. .. .. Guinea-Bissau -6.8 49.5 -2.1 -27.1 .. -24.2 210.0 .. .. .. .. .. .. .. .. .. .. Kenya 6.3 8.1 1.7 10.3 -1.2 2.9 28.0 -25.6 14.3 -10.1 14.7 3.8 25.0 14.7 8.1 -7.3 3.8 Lesotho 9.4 17.1 20.8 -15.6 -11.1 -37.7 43.3 -9.4 -64.3 19.4 63.2 .. 55.8 63.2 .. .. .. Madagascar -0.8 -3.4 30.5 -1.1 .. -28.1 54.9 .. .. .. .. .. .. .. .. .. .. Malawi .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mali -0.7 -0.7 -33.2 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritania 2.0 -26.5 19.7 10.5 .. .. -23.6 -38.6 .. .. .. .. .. .. .. .. .. .. Mauritius -0.9 5.5 -0.6 7.0 8.6 -12.5 19.8 13.5 -2.0 18.4 18.1 -4.4 18.8 18.1 15.3 7.4 -4.4 Mozambique 13.8 1.1 25.7 22.6 .. 24.5 40.7 .. .. .. .. .. .. .. .. .. .. Namibia 6.7 19.9 -0.7 0.1 8.1 -29.8 -18.6 19.1 12.7 178.4 -53.9 .. -5.8 -53.9 .. .. .. Niger 8.6 -60.2 122.3 -11.4 .. -98.1 204.0 .. .. .. .. .. .. .. .. .. .. Nigeria -3.1 45.9 12.2 15.3 -34.8 3.1 -49.9 -50.5 -13.4 -49.6 -49.2 .. -48.8 -49.2 .. .. .. Rwanda .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Senegal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Seychelles 7.2 2.4 -7.9 19.9 .. 8.4 0.7 .. .. .. .. .. .. .. .. .. .. Sierra Leone .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. South Africa 0.7 7.1 7.1 -0.4 4.8 0.7 3.2 -4.1 20.2 13.5 5.9 -10.4 1.7 5.9 12.9 3.3 -10.4 South Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sudan 7.9 11.4 -45.8 -66.2 32.9 -64.5 190.2 -39.2 200.8 227.5 -23.6 .. 28.5 -23.6 .. .. .. Swaziland .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tanzania 9.3 12.2 -1.9 17.7 .. -24.7 -22.3 -32.7 46.5 38.1 .. .. 65.1 .. .. .. .. Togo .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Uganda 13.4 -16.4 -2.4 25.2 12.2 8.2 5.1 26.1 30.5 -28.7 5.2 .. -12.4 5.2 .. .. .. Zambia 14.1 48.9 -20.0 -7.7 .. -56.6 10.7 .. .. .. .. .. .. .. .. .. .. Zimbabwe .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. a. Year over Year percent growth b. Quarter over quarter percent growth, seasonally adjusted annualized rate c. Three month over three month moving average of seasonally adjusted annualized growth rate d. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 119 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.11 Industrial Production Growth (Indexed on constant 2010 US Dollars Recent Yearsa Recent Quartersb Recent Monthsc 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar World 1.5 9.2 5.2 3.0 2.6 1.5 6.6 2.4 5.3 3.4 5.8 5.3 4.5 4.1 3.4 High Income Countries -0.4 8.0 3.5 0.9 0.5 -0.6 7.9 0.6 4.7 3.1 4.8 4.7 3.8 3.8 3.1 Euro Area -0.8 7.7 4.2 -2.9 -1.0 -3.0 12.7 -3.2 1.9 2.1 0.9 1.9 1.9 4.4 2.1 OECD Countries -0.6 8.0 2.9 0.5 0.6 0.3 8.0 -0.5 4.7 4.3 4.5 4.7 4.3 4.7 4.3 Non-OECD Countries 1.6 6.9 8.6 3.7 0.4 -5.5 3.6 9.5 2.6 -4.2 5.4 2.6 0.6 -2.3 -4.2 Developing Countries 6.2 11.2 8.0 6.3 5.5 4.6 4.8 4.9 6.3 3.7 7.2 6.3 5.5 4.6 3.7 East Asia and the Pacific 9.8 14.4 11.4 9.1 8.9 7.4 4.6 11.1 11.9 3.2 13.4 11.9 8.6 6.0 3.2 Cambodia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. China 12.9 15.5 13.7 10.0 9.7 9.6 5.8 12.5 11.8 4.7 13.1 11.8 9.0 6.5 4.7 Indonesia 2.6 4.5 4.0 4.1 6.0 -2.2 -2.6 0.6 10.5 7.0 15.5 10.5 9.0 7.5 7.0 Lao People's Dem. Rep. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Malaysia 2.7 11.1 5.7 5.3 4.2 -11.7 16.2 7.9 8.4 -3.1 13.5 8.4 4.9 0.2 -3.1 Mongolia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Papua New Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Philippines -2.9 23.5 1.4 7.6 13.8 21.6 10.4 31.1 23.5 -36.4 30.1 23.5 0.2 -13.3 -36.4 Solomon Islands .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Thailand 5.5 14.3 -8.7 2.5 -3.3 -12.6 -20.6 -5.9 15.3 -13.7 4.5 15.3 6.5 5.9 -13.7 Vanuatu .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Viet Nam .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Europe and Central Asia .. 13.4 14.8 8.3 2.2 9.2 1.9 0.4 5.6 13.5 8.6 5.6 7.5 8.4 13.5 Albania .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Armenia 8.2 23.8 23.0 12.4 11.5 47.3 -37.2 32.3 32.8 -26.4 35.4 32.8 -1.5 -14.7 -26.4 Azerbaijan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Belarus .. 31.0 107.2 78.4 -1.0 5.1 -2.3 10.3 -16.4 49.0 -10.9 -16.4 -0.6 25.6 49.0 Bulgaria 4.3 3.5 5.5 -0.2 0.6 8.8 -7.2 5.3 7.0 7.2 16.8 7.0 3.3 7.6 7.2 Georgia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Hungary 2.7 11.8 6.2 -1.7 2.0 5.1 9.2 10.6 1.5 18.4 4.4 1.5 4.9 12.1 18.4 Kazakhstan 7.8 14.3 6.2 -0.7 -3.3 15.4 -10.5 -27.6 52.5 1.3 40.2 52.5 20.7 6.2 1.3 Kyrgyz Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Macedonia, FYR 0.1 -7.7 6.0 -4.3 3.5 21.8 -2.7 -11.4 34.6 23.5 16.8 34.6 55.8 35.4 23.5 Moldova .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Romania 2.3 6.1 8.2 2.2 9.2 10.0 16.7 4.7 14.2 10.8 17.9 14.2 13.2 11.9 10.8 Turkey .. 12.4 9.6 2.6 3.4 4.9 4.6 4.8 4.0 5.7 8.4 4.0 9.2 4.4 5.7 Ukraine .. 32.0 23.0 -3.5 -1.1 27.6 -8.1 -12.0 -3.8 17.9 -1.1 -3.8 -5.2 -2.9 17.9 Uzbekistan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Latin America and the Caribbean 1.8 6.1 2.5 -0.1 1.1 -2.5 12.3 -3.7 -5.6 0.1 -1.5 -5.6 -6.0 -4.3 0.1 Argentina 3.5 9.8 6.7 -1.1 -0.2 -5.5 6.6 -6.8 -8.0 -3.6 -9.0 -8.0 -11.7 -6.7 -3.6 Belize .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Bolivia 0.7 2.2 2.8 16.4 .. 6.9 -8.1 2.1 .. .. .. .. .. .. .. Brazil 2.2 10.2 0.4 -2.6 2.9 0.7 15.8 -4.6 -9.7 1.3 0.7 -9.7 -11.5 -8.7 1.3 Colombia 2.4 4.2 4.9 -0.3 -1.3 -12.4 20.2 -1.0 -0.5 1.9 -0.2 -0.5 -0.1 3.9 1.9 Costa Rica .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Dominica .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Dominican Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ecuador 2.0 -0.1 2.9 1.1 .. 3.4 .. .. .. .. .. .. .. .. .. El Salvadore 1.4 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guatemala .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guyana .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Haiti .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Honduras .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Jamaica .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mexico 0.5 4.6 3.5 2.6 -0.6 -1.2 -1.5 1.5 0.0 1.6 -0.5 0.0 0.5 1.0 1.6 Nicaragua 2.7 8.2 6.0 2.7 .. .. .. .. .. .. .. .. .. .. .. Panama .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Paraguay .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Peru 4.1 14.0 5.8 -1.0 4.8 9.1 20.9 -4.6 19.6 .. 6.1 19.6 14.9 -1.8 .. St. Lucia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. St. Vincent and the Grenadines .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Venezuela, Bolivarian Rep. of 1.8 -2.7 1.8 1.7 .. -10.7 32.9 -9.9 .. .. .. .. .. .. .. Middle East and North Africa 2.2 2.2 -10.1 6.4 -8.0 -4.2 0.6 -33.0 -16.2 13.4 -34.3 -16.2 -0.6 16.1 13.4 Algeria 4.3 -1.7 -2.5 1.4 -0.5 3.8 0.4 -12.3 1.8 -11.6 -16.3 1.8 4.4 0.8 -11.6 Egypt .. 10.1 -6.7 4.9 -7.7 4.0 -22.2 -42.3 0.4 56.3 -23.7 0.4 50.2 64.0 56.3 Iran, Islamic Rep. of -0.3 -0.3 0.2 -20.2 -10.0 -0.3 -1.9 2.1 -1.3 8.9 -11.2 -1.3 7.1 10.8 8.9 Jordan 4.2 -5.5 -2.2 1.5 3.3 14.5 -10.3 -3.0 14.1 -6.1 26.5 14.1 7.2 -8.4 -6.1 Lebanon .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Morocco .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Syrian Arab Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tunisia 2.2 9.2 -1.9 1.5 1.8 -2.4 -0.5 7.5 0.8 .. 9.8 0.8 -7.1 -12.1 .. Yemen .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 120 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Recent Yearsa Recent Quartersb Recent Monthsc 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar South Asia 6.8 9.4 5.4 1.3 1.5 3.6 -7.1 8.4 -2.9 2.8 3.7 -2.9 2.5 1.3 2.8 Bangladesh 6.8 9.6 17.0 9.3 9.7 8.2 16.1 -0.4 3.6 .. 14.1 3.6 .. .. .. India 6.9 9.7 4.8 0.7 0.5 2.6 -9.5 9.4 -4.8 3.4 1.6 -4.8 0.0 0.6 3.4 Nepal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Pakistan 5.8 1.6 2.7 1.8 6.2 11.0 -0.7 8.9 6.0 -13.3 14.9 6.0 3.7 -0.8 -13.3 Sri Lanka .. .. 8.1 -0.3 1.0 4.5 -2.8 1.3 17.3 .. 13.7 17.3 8.9 .. .. Sub-Saharan Africa 0.5 4.6 3.4 3.5 0.9 -6.1 11.0 -8.3 10.0 -5.1 -2.8 10.0 11.7 7.8 -5.1 Angola .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Benin .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Botswana .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Burkina Faso .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Burundi .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Cameroon .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Cabo Verde .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Chad .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Comoros .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Congo, Democratic Rep. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Congo, Rep. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Cote d'Ivoire .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Eritrea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ethiopia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Gabon 0.9 3.6 14.5 28.8 -2.5 -28.4 -4.5 21.9 6.2 -13.0 3.8 6.2 11.0 -0.6 -13.0 Gambia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ghana .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guinea-Bissau .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Kenya .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Lesotho .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Madagascar .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Malawi .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mali .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritania .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritius .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mozambique .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Namibia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Niger .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Nigeria .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Rwanda .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Senegal .. 2.9 6.7 -0.5 .. -16.5 .. .. .. .. .. .. .. .. .. Seychelles .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sierra Leone .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. South Africa 0.4 4.6 2.8 2.3 1.3 -4.2 12.3 -9.9 10.3 -4.6 -3.2 10.3 11.7 8.3 -4.6 South Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Swaziland .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tanzania .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Togo .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Uganda .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Zambia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Zimbabwe .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. a. Year over Year percent growth in total industrial production volume b. Quarter over quarter percent growth, seasonally adjusted annualized rate c. Three month over three month moving average of seasonally adjusted annualized growth rate d. Compound average of the period 2000-2009 Source: World Bank, IFS, Haver Analytics 121 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.12 Inflation (Growth in 2010 based consumer price index) Recent Yearsa Recent Quartersb Recent Monthsc 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar World 2.7 2.9 4.2 3.4 3.4 3.5 3.0 4.0 3.4 3.1 3.5 3.4 3.5 3.3 3.1 High Income Countries 1.9 1.7 2.8 2.1 1.6 1.2 0.9 2.3 1.2 1.5 1.4 1.2 1.5 1.6 1.5 Euro Area 1.9 1.5 2.6 2.3 1.3 0.8 0.6 1.8 0.0 0.5 0.3 0.0 0.2 0.6 0.5 OECD Countries 1.9 1.7 2.7 2.1 1.5 1.2 0.9 2.3 1.1 1.5 1.2 1.1 1.4 1.6 1.5 Non-OECD Countries 4.9 4.1 5.3 3.8 4.2 3.9 3.6 3.6 4.4 4.2 4.0 4.4 4.4 4.1 4.2 Developing Countries 4.8 5.9 7.5 6.4 7.4 8.4 7.6 7.5 7.9 6.5 7.8 7.9 7.7 6.7 6.5 East Asia and the Pacific 2.4 3.4 5.6 2.8 3.0 3.7 2.7 4.0 3.3 1.7 3.9 3.3 2.7 1.9 1.7 Cambodia 5.0 4.0 5.5 2.9 2.9 3.2 3.1 5.2 5.8 3.6 4.9 5.8 6.4 5.9 .. China 1.8 3.2 5.5 2.6 2.6 3.5 2.3 3.0 2.9 0.9 3.4 2.9 2.0 1.1 0.9 Indonesia 8.0 5.1 5.3 4.0 6.4 7.0 6.9 13.6 5.0 5.9 7.4 5.0 5.3 5.9 5.9 Lao People's Dem. Rep. 7.0 6.0 7.6 4.3 6.4 9.4 3.5 6.8 7.5 4.8 6.8 7.5 8.4 7.1 4.8 Malaysia 2.0 1.7 3.2 1.7 2.1 1.8 2.4 2.7 4.9 3.7 5.5 4.9 4.4 3.6 3.7 Mongolia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Papua New Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Philippines 4.8 4.1 4.7 3.2 2.9 2.5 2.2 3.7 5.5 5.3 5.0 5.5 6.6 6.2 5.3 Solomon Islands 8.4 1.0 7.4 5.9 6.7 11.2 2.6 8.7 6.3 -0.8 7.6 6.3 4.4 .. .. Thailand 2.2 3.3 3.8 3.0 2.2 1.7 -0.2 1.8 3.3 3.1 2.5 3.3 3.9 3.8 3.1 Vanuatu .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Viet Nam 6.6 9.2 18.7 9.1 6.6 5.7 2.3 7.5 8.0 1.6 8.7 8.0 6.4 4.4 1.6 Europe and Central Asia 11.4 7.3 8.2 8.7 6.2 7.5 4.9 6.1 3.5 8.7 3.2 3.5 4.9 6.9 8.7 Albania 2.7 3.5 3.4 2.1 1.9 1.9 2.3 0.8 1.2 3.4 0.9 1.2 1.0 2.3 3.4 Armenia 3.6 8.2 7.6 2.5 5.8 3.5 6.1 17.4 -0.7 -3.0 4.5 -0.7 -2.3 -3.2 -3.0 Azerbaijan 6.8 5.8 7.9 1.1 2.5 4.2 4.7 1.0 2.3 0.3 0.1 2.3 2.6 3.2 0.3 Belarus 19.2 7.7 53.2 59.5 18.3 31.7 15.9 6.2 11.0 29.9 7.0 11.0 17.7 24.9 29.9 Bulgaria 5.7 2.5 4.2 3.0 0.9 -1.9 -3.3 -1.5 1.2 -5.9 -1.0 1.2 0.9 -2.0 -5.9 Georgia 5.9 7.1 8.5 -0.9 -0.5 -5.2 4.4 1.7 3.9 3.4 -0.7 3.9 5.7 6.5 3.4 Hungary 5.3 4.9 3.8 5.7 1.6 -0.5 0.3 2.3 0.6 -3.1 1.9 0.6 -0.9 -2.4 -3.1 Kazakhstan 7.9 7.1 8.4 5.1 5.7 6.3 3.3 4.7 4.3 8.3 4.0 4.3 4.3 5.9 8.3 Kyrgyz Republic 6.6 8.0 16.5 2.7 6.6 3.6 4.2 6.0 3.1 5.4 4.2 3.1 1.7 1.9 5.4 Macedonia, FYR 2.0 1.7 3.9 3.3 2.8 1.0 3.2 1.3 -0.6 -0.4 -0.6 -0.6 -0.4 -0.1 -0.4 Moldova 8.7 7.4 7.6 4.6 4.6 3.7 4.8 4.1 7.1 5.7 6.5 7.1 7.0 6.2 5.7 Romania 11.4 6.1 5.8 3.3 4.0 5.1 2.1 0.0 0.1 2.0 -1.2 0.1 1.2 2.1 2.0 Turkey 16.5 8.6 6.5 8.9 7.5 9.2 6.5 10.2 4.3 11.3 4.8 4.3 5.9 8.6 11.3 Ukraine 10.1 9.3 7.9 0.6 -0.2 -1.4 -0.3 1.6 0.7 4.9 0.3 0.7 1.2 1.9 4.9 Uzbekistan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Latin America and the Caribbean 6.4 6.7 7.6 7.0 9.9 10.8 12.2 10.0 13.6 13.9 12.2 13.6 14.0 13.4 13.9 Argentina 8.5 10.5 9.8 10.0 10.6 10.9 9.0 10.9 11.8 .. 10.9 11.8 .. .. .. Belize .. .. -3.6 1.3 0.5 -2.1 1.4 1.1 4.7 -0.3 3.6 4.7 3.7 1.8 .. Bolivia 4.3 2.5 9.9 4.5 5.7 6.1 5.5 8.8 7.4 2.9 10.8 7.4 3.6 2.0 2.9 Brazil 6.5 5.1 6.6 5.4 6.4 8.9 6.1 1.5 5.9 8.3 3.7 5.9 7.1 7.9 8.3 Colombia 5.3 2.3 3.4 3.2 2.0 0.7 2.3 3.0 1.4 2.6 2.2 1.4 1.4 1.8 2.6 Costa Rica 9.7 5.7 4.9 4.5 5.2 7.6 4.5 2.7 0.5 4.5 2.2 0.5 1.1 2.2 4.5 Dominica 1.9 3.2 2.4 1.4 -0.4 -3.0 -4.4 4.5 -1.7 .. 1.1 -1.7 .. .. .. Dominican Republic 11.4 6.3 8.4 3.7 4.8 7.3 2.3 4.2 3.1 2.4 4.1 3.1 2.4 2.4 2.4 Ecuador 7.8 3.6 4.5 5.1 2.7 0.9 0.5 3.0 5.0 3.4 4.3 5.0 5.3 4.6 3.4 El Salvadore 3.3 1.2 5.1 1.7 0.8 1.8 -2.1 1.7 1.4 1.3 1.4 1.4 1.8 1.7 1.3 Guatemala 6.4 3.9 6.2 3.8 4.3 5.3 4.2 4.0 4.1 2.2 3.8 4.1 4.2 3.4 2.2 Guyana 5.5 2.2 5.0 2.4 1.7 1.4 -1.8 .. .. .. .. .. .. .. .. Haiti 13.4 5.7 8.4 6.3 5.8 4.3 4.0 3.4 2.9 2.8 3.1 2.9 2.5 2.6 2.8 Honduras 7.1 4.7 6.8 5.2 5.2 5.8 3.7 5.0 4.6 10.1 4.7 4.6 6.6 8.4 10.1 Jamaica 10.1 12.6 7.5 6.9 9.4 10.2 8.7 8.7 12.5 5.2 14.8 12.5 9.6 6.0 5.2 Mexico 4.3 4.2 3.4 4.1 3.8 3.1 5.3 2.2 4.0 5.1 3.4 4.0 4.8 5.2 5.1 Nicaragua 7.6 5.5 8.1 7.2 7.1 10.4 7.2 5.6 2.0 6.0 2.7 2.0 2.8 4.6 6.0 Panama 2.4 3.5 5.9 5.7 4.0 5.4 5.1 3.1 1.8 3.6 2.0 1.8 2.0 2.6 3.6 Paraguay 7.3 4.7 8.2 3.7 2.7 1.7 1.0 7.2 6.7 5.7 6.8 6.7 6.7 5.6 5.7 Peru 2.2 1.5 3.4 3.7 2.8 2.2 3.3 3.9 2.5 4.1 2.9 2.5 2.3 3.3 4.1 St. Lucia 2.2 3.3 2.8 4.2 1.5 -5.2 -1.0 -4.0 1.2 .. -1.3 1.2 .. .. .. St. Vincent and the Grenadines 3.0 1.5 3.2 2.6 0.8 2.7 0.0 -1.6 -0.1 .. -0.5 -0.1 .. .. .. Venezuela, Bolivarian Rep. of 19.0 28.2 26.1 21.1 40.6 42.3 61.8 58.0 63.1 48.4 62.8 63.1 58.1 47.9 48.4 Middle East and North Africa 7.3 7.3 11.8 12.2 20.0 24.6 20.9 15.8 10.9 8.5 11.7 10.9 11.1 10.0 8.5 Algeria 3.3 4.2 5.8 9.7 4.1 2.1 1.9 2.2 1.6 2.8 0.4 1.6 3.8 4.0 2.8 Egypt 7.2 11.1 10.1 7.1 9.5 16.7 10.6 8.3 11.6 10.3 9.8 11.6 12.6 11.5 10.3 Iran, Islamic Rep. of 13.6 10.2 20.6 19.9 39.2 48.0 40.2 29.6 15.4 11.7 18.8 15.4 14.8 13.4 11.7 Jordan 3.6 5.0 4.4 4.8 5.5 6.5 1.1 4.5 2.7 4.2 3.3 2.7 2.0 3.0 4.2 Lebanon .. 4.0 5.0 6.6 5.6 8.9 -2.6 -5.6 2.5 5.3 .. 2.5 4.7 4.4 5.3 Morocco 1.7 1.0 0.9 1.3 1.9 2.3 1.8 -0.1 .. 0.1 -0.2 .. -0.1 0.2 0.1 Syrian Arab Republic 4.7 4.4 4.8 36.7 37.1 31.6 39.6 59.9 29.0 .. .. .. .. .. .. Tunisia 2.9 4.4 3.5 5.6 6.1 7.3 6.0 4.5 5.7 5.4 5.0 5.7 6.2 6.5 5.4 Yemen 10.0 11.2 16.4 17.3 15.6 18.2 17.3 16.7 11.1 .. .. .. .. .. .. 122 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Recent Yearsa Recent Quartersb Recent Monthsc 2013 2014 2013 2014 00-09d 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar South Asia 5.4 10.2 9.8 9.5 9.6 10.3 9.0 9.7 11.0 3.3 10.9 11.0 9.2 4.7 3.3 Bangladesh 5.5 8.2 10.3 6.5 7.5 8.3 6.6 5.5 8.2 9.0 7.1 8.2 9.1 9.4 9.0 India 5.1 10.3 9.6 9.7 10.0 10.6 9.6 9.9 11.4 2.8 11.5 11.4 9.2 4.3 2.8 Nepal 5.4 9.3 9.3 9.4 9.0 8.1 7.1 10.9 12.3 6.3 10.9 12.3 13.2 9.8 6.3 Pakistan 7.3 12.9 11.9 9.7 7.7 10.0 6.4 11.2 11.4 3.9 9.4 11.4 10.4 6.7 3.9 Sri Lanka 10.0 6.2 6.7 7.5 6.9 6.9 5.7 6.6 3.6 1.4 4.3 3.6 2.1 1.4 1.4 Sub-Saharan Africa 7.9 7.9 9.5 10.8 7.8 6.8 4.8 6.3 8.6 6.9 8.3 8.6 8.4 7.4 6.9 Angola 40.5 14.5 13.5 10.3 8.8 9.1 9.7 8.0 5.3 7.2 6.5 5.3 5.2 5.5 7.2 Benin 2.9 2.3 2.7 6.8 1.0 -1.0 -0.7 1.2 -6.9 2.3 -3.9 -6.9 -4.6 -0.9 2.3 Botswana 7.8 6.9 8.5 7.5 5.9 6.9 2.5 2.7 5.1 7.3 4.7 5.1 5.9 6.9 7.3 Burkina Faso 3.0 -0.8 2.7 3.8 0.6 -1.2 0.6 -3.0 -1.1 2.7 -3.3 -1.1 3.1 2.5 2.7 Burundi 8.4 6.4 9.8 18.0 8.0 10.0 7.5 11.3 4.6 -2.5 6.7 4.6 2.1 0.0 -2.5 Cameroon 2.4 1.3 2.9 2.9 1.9 1.5 1.8 1.5 1.2 .. 2.8 1.2 .. .. .. Cabo Verde 2.2 2.1 4.5 2.5 1.5 .. -0.4 -2.8 1.4 2.1 0.9 .. 2.0 2.1 2.4 2.1 0.9 Chad 3.5 -2.1 -3.7 14.0 -0.6 -7.3 0.0 -2.3 .. .. .. .. .. .. .. Comoros 3.4 3.4 1.7 1.7 2.3 3.0 -3.1 17.0 -7.0 9.2 2.3 -7.0 -5.9 4.9 9.2 Congo, Democratic Rep. 33.5 -18.0 15.3 9.7 1.6 1.4 -1.7 1.7 6.2 .. 5.5 6.2 .. .. .. Congo, Rep. 3.1 5.0 1.3 3.9 6.0 -0.9 2.8 6.5 8.6 -22.1 8.3 8.6 -3.9 .. .. Cote d'Ivoire 2.7 1.4 4.9 1.3 2.6 2.1 -1.7 2.1 1.9 -2.1 2.8 1.9 0.1 -1.0 -2.1 Eritrea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ethiopia 10.2 8.2 33.0 22.9 8.1 3.8 1.1 16.2 11.8 4.0 14.9 11.8 9.3 5.7 4.0 Gabon 1.9 1.5 1.3 2.7 0.5 -2.7 -2.6 4.0 15.8 .. 23.6 15.8 .. .. .. Gambia 6.4 5.0 4.8 4.3 5.5 6.2 6.0 6.0 4.5 .. 5.5 .. .. .. .. Ghana 15.6 10.7 8.7 9.1 11.6 17.9 5.0 11.8 26.1 14.4 23.4 26.1 22.3 17.1 14.4 Guinea .. 15.5 21.4 15.2 11.9 13.8 9.7 10.9 7.7 .. 8.7 7.7 .. .. .. Guinea-Bissau 2.2 2.5 5.0 2.1 0.7 1.0 -3.2 2.0 3.8 -9.1 5.4 3.8 -1.9 -6.6 -9.1 Kenya 9.8 4.1 14.0 9.4 5.7 8.6 5.4 9.0 6.8 6.0 9.9 6.8 5.9 5.4 6.0 Lesotho 7.4 3.6 5.0 6.1 4.9 4.8 3.5 4.9 7.7 4.5 7.5 7.7 5.6 5.5 .. Madagascar 9.2 9.2 9.5 6.4 5.8 3.4 8.1 8.4 5.8 2.1 6.8 5.8 4.4 2.9 2.1 Malawi 11.2 7.4 7.6 21.6 27.1 20.0 24.3 13.7 26.4 35.9 22.5 26.4 29.4 33.2 35.9 Mali 2.6 1.1 2.9 5.4 -0.6 -5.4 1.2 0.5 3.1 -0.3 2.2 3.1 3.8 1.3 -0.3 Mauritania 5.9 6.3 5.6 4.9 4.0 .. 4.3 4.4 6.9 2.1 .. .. 3.9 .. .. .. .. Mauritius 5.5 2.9 6.5 3.9 3.5 2.8 4.7 2.3 5.5 7.7 4.3 5.5 7.0 8.1 7.7 Mozambique 9.3 13.0 10.3 2.1 4.2 4.8 5.9 1.0 2.2 0.3 2.3 2.2 1.3 0.1 .. Namibia .. 4.9 5.0 6.7 5.6 3.8 5.0 4.8 5.2 5.6 5.0 5.2 5.1 5.3 5.6 Niger 2.4 0.8 2.9 0.5 2.3 3.0 3.7 6.4 -4.4 -3.6 -0.6 -4.4 -4.8 -4.9 -3.6 Nigeria 11.5 13.7 10.8 12.2 8.5 7.9 5.1 5.7 13.4 7.9 10.8 13.4 14.0 11.1 7.9 Rwanda 7.7 2.3 5.7 6.3 4.2 6.9 3.3 4.5 3.4 1.1 6.9 3.4 -0.2 -0.6 1.1 Senegal 2.0 1.2 3.4 1.4 0.7 -2.4 1.4 1.9 1.8 -5.1 3.7 1.8 -1.3 -4.5 -5.1 Seychelles 8.1 -2.4 2.6 7.1 4.4 4.7 4.5 2.7 2.1 1.5 2.6 2.1 1.2 1.1 1.5 Sierra Leone .. 16.6 16.2 12.9 10.3 10.2 9.4 7.6 8.2 4.8 8.5 8.2 7.9 5.8 4.8 South Africa 4.8 4.1 5.0 5.7 5.8 5.7 4.6 6.4 4.7 7.9 5.7 4.7 5.0 6.3 7.9 South Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sudan 7.8 13.3 22.1 37.3 .. .. .. .. .. .. .. .. .. .. .. Swaziland 6.6 4.5 6.1 8.9 5.6 4.6 4.6 5.4 3.5 .. 4.1 3.5 .. .. .. Tanzania 6.2 6.2 12.7 16.0 7.9 7.5 5.4 4.3 7.0 7.5 5.6 7.0 7.7 7.6 7.5 Togo 2.8 1.8 3.6 2.6 1.8 3.0 -0.7 -0.9 -0.2 -2.8 1.7 -0.2 -4.1 -5.5 -2.8 Uganda 6.0 4.0 18.7 14.0 5.5 6.0 5.8 11.7 5.3 5.4 9.1 5.3 3.1 3.9 5.4 Zambia 14.5 8.5 6.4 6.6 7.0 5.8 8.2 7.2 6.9 7.9 6.4 6.9 7.3 7.6 7.9 Zimbabwe .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. a. Year over Year inflation in Consumer Price Index b. Quarter over quarter inflation, seasonally adjusted annualized rate c. Three month over three month moving average of seasonally adjusted annualized inflation d. Average inflation over the period 2000-2009 Source: World Bank, IFS, Haver Analytics 123 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.13 Unemployment (Percentage of working age population) Recent Years Recent Quarters Recent Months 2013 2014 2013 2014 a 00-09 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar World 7.1 7.4 7.2 7.1 7.0 7.1 7.1 7.0 7.0 6.9 7.0 6.9 6.9 6.9 6.9 High Income Countries 7.1 8.6 8.3 8.0 7.9 8.0 8.0 7.9 7.8 7.6 7.8 7.7 7.6 7.6 7.6 Euro Area 8.8 10.9 11.1 12.5 13.6 12.7 13.0 13.1 12.9 12.9 12.8 12.7 12.8 12.8 12.7 OECD Countries 6.8 8.7 8.3 8.1 8.1 8.2 8.1 8.1 7.9 7.8 7.9 7.8 7.7 7.8 7.8 Non-OECD Countries 8.3 7.6 6.7 5.8 5.8 5.8 5.9 5.8 5.8 5.7 5.8 5.8 5.6 5.7 5.7 Developing Countries 7.0 7.0 6.8 6.8 6.8 6.8 6.8 6.8 6.7 6.7 6.7 6.7 6.7 6.7 6.7 East Asia and the Pacific 4.9 4.6 4.4 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 Cambodia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. China 3.9 4.1 4.1 4.1 4.1 4.1 4.1 4.0 4.1 4.1 4.1 4.1 4.1 4.1 4.1 Indonesia 9.3 7.2 6.6 6.0 5.9 5.9 5.8 6.1 5.8 5.7 5.8 5.8 5.8 5.7 5.7 Lao People's Dem. Rep. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Malaysia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mongolia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Papua New Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Philippines 9.8 7.4 7.0 7.0 7.1 6.9 7.3 7.2 7.0 7.3 7.0 7.0 7.3 7.3 7.3 Solomon Islands .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Thailand 1.9 1.0 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.9 0.9 Vanuatu .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Viet Nam .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Europe and Central Asia 7.0 7.6 6.6 6.3 6.5 6.4 6.5 6.6 6.5 .. 6.6 6.5 6.4 6.3 .. Albania .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Armenia 11.0 19.0 18.4 17.3 16.2 16.2 16.2 16.2 16.2 .. 16.2 16.2 .. .. .. Azerbaijan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Belarus .. 0.8 0.7 0.6 0.5 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Bulgaria 12.3 9.5 9.6 11.1 11.3 11.3 11.2 11.2 11.6 11.6 11.5 11.7 11.6 11.5 11.6 Georgia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Hungary 6.9 11.1 11.0 10.9 10.4 11.1 10.5 10.3 9.6 8.3 9.6 9.3 8.8 8.2 7.9 Kazakhstan 8.1 5.8 5.4 5.3 5.2 5.2 5.2 5.3 5.2 5.0 5.2 5.2 5.0 5.0 5.0 Kyrgyz Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Macedonia, FYR 35.2 32.0 31.4 31.0 29.0 29.6 29.0 28.9 28.5 .. 28.5 28.4 .. .. .. Moldova .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Romania 7.1 7.6 5.4 5.1 5.3 5.2 5.3 5.2 5.4 5.3 5.4 5.5 5.3 5.3 5.4 Turkey 10.1 11.1 9.1 8.4 9.1 8.7 8.9 9.4 9.2 .. 9.3 9.1 9.2 9.1 .. Ukraine 3.2 1.6 1.8 1.7 1.7 1.8 1.8 1.8 1.7 1.6 1.7 1.7 1.7 1.6 1.6 Uzbekistan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Latin America and the Caribbean 8.7 7.1 6.6 6.2 6.0 6.1 6.1 6.0 5.8 5.7 5.7 5.8 5.8 5.7 5.7 Argentina 12.5 7.7 7.1 7.2 7.1 7.7 7.1 6.7 6.7 6.9 6.7 6.7 6.9 6.9 6.9 Belize .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Bolivia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Brazil 10.1 6.7 6.0 5.5 5.4 5.4 5.5 5.4 5.2 4.8 5.1 5.2 5.0 5.0 4.5 Colombia 13.4 11.8 10.9 10.4 9.7 10.2 9.9 9.5 9.3 9.3 9.3 9.2 9.2 9.2 9.4 Costa Rica .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Dominica .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Dominican Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ecuador 9.5 .. .. .. .. .. .. .. .. .. .. .. .. .. .. El Salvadore .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guatemala .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guyana .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Haiti .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Honduras .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Jamaica .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mexico 3.6 5.4 5.2 5.0 4.9 5.0 5.0 4.9 4.7 4.9 4.6 4.8 4.8 4.8 5.2 Nicaragua .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Panama .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Paraguay .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Peru 8.9 7.8 7.7 6.8 5.9 5.7 6.1 5.9 6.0 6.3 5.9 6.5 6.0 6.3 6.6 St. Lucia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. St. Vincent and the Grenadines .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Venezuela, Bolivarian Rep. of 12.3 8.5 8.2 7.8 7.5 7.5 7.5 7.7 7.5 7.2 7.6 7.2 7.6 7.1 7.1 Middle East and North Africa 9.8 9.0 11.1 11.6 12.1 11.7 12.1 12.2 12.3 12.1 12.3 12.3 12.1 12.1 12.1 Algeria .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Egypt 10.0 9.0 12.0 12.7 13.3 13.0 13.2 13.6 13.5 13.2 13.5 13.4 13.2 13.2 13.1 Iran, Islamic Rep. of .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Jordan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Lebanon .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Morocco 9.5 9.1 8.9 9.0 9.2 8.9 9.4 8.9 9.7 9.6 9.7 9.7 9.6 9.6 9.7 Syrian Arab Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tunisia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Yemen .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 124 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Recent Years Recent Quarters Recent Months 2013 2014 2013 2014 00-09a 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar South Asia 9.9 9.4 9.3 9.4 .. .. .. .. .. .. .. .. .. .. .. Bangladesh .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. India 9.4 10.0 9.8 9.9 .. .. .. .. .. .. .. .. .. .. .. Nepal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Pakistan 7.0 5.6 6.0 .. 6.2 6.2 6.2 6.2 6.2 .. 6.2 6.2 .. .. .. Sri Lanka 7.2 4.9 4.2 4.0 4.4 4.4 4.4 4.4 4.4 .. 4.4 4.4 .. .. .. Sub-Saharan Africa .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Angola .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Benin .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Botswana .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Burkina Faso .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Burundi .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Cameroon .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Cabo Verde .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Chad .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Comoros .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Congo, Democratic Rep. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Congo, Rep. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Cote d'Ivoire .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Eritrea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ethiopia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Gabon .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Gambia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ghana .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guinea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Guinea-Bissau .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Kenya .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Lesotho .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Madagascar .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Malawi .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mali .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritania .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritius 8.4 7.7 7.9 8.0 .. 8.2 8.0 7.9 .. .. .. .. .. .. .. Mozambique .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Namibia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Niger .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Nigeria .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Rwanda .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Senegal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Seychelles .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sierra Leone .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. South Africa 23.1 24.9 24.8 24.9 24.7 24.9 24.9 24.2 24.9 25.0 24.9 24.9 25.0 25.1 25.0 South Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Swaziland .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tanzania .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Togo .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Uganda .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Zambia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Zimbabwe .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. a. Average annual unemployment during period 2000-2009 Source: World Bank, IFS, Haver Analytics 125 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.14 Total reserves in terms of merchandise imports Years of imports covered Average months covered per quarter Months of imports covered 2013 2014 2013 2014 a 00-09 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar World 0.4 0.6 0.6 0.6 0.7 7.6 7.8 7.7 7.9 8.0 8.0 7.9 7.7 8.0 8.2 High Income Countries 0.3 0.4 0.4 0.4 0.5 5.4 5.4 5.4 5.4 5.5 5.5 5.4 5.3 5.5 5.5 Euro Area 0.1 0.1 0.1 0.1 0.1 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 OECD Countries 0.2 0.3 0.3 0.3 0.3 3.8 3.8 3.8 3.8 3.9 3.9 3.8 3.8 3.9 4.0 Non-OECD Countries 0.9 1.1 1.0 1.1 1.1 12.7 13.2 13.2 13.3 13.4 13.5 13.1 13.4 13.4 13.3 Developing Countries 0.8 1.2 1.0 1.0 1.1 12.2 12.6 12.7 13.1 13.4 13.3 13.1 12.7 13.3 14.3 East Asia and the Pacific 1.0 1.6 1.5 1.4 1.5 16.8 17.7 17.6 18.1 18.9 18.5 18.1 17.4 18.4 20.8 Cambodia 0.3 0.6 0.5 0.5 .. 6.9 .. .. .. .. .. .. .. .. .. China 1.3 2.1 1.8 1.8 2.0 21.1 22.5 22.2 22.9 23.7 23.4 22.6 21.7 22.9 26.6 Indonesia 0.8 0.7 0.6 0.6 0.5 6.3 6.3 6.1 6.2 6.5 6.2 6.2 6.2 6.6 6.7 Lao People's Dem. Rep. 0.4 0.3 .. .. .. .. .. .. .. .. .. .. .. .. .. Malaysia 0.6 0.6 0.7 0.7 0.6 7.9 8.1 8.0 7.8 7.6 7.8 7.8 7.4 7.5 7.9 Mongolia 0.3 0.6 0.3 0.5 .. 6.2 .. .. .. .. .. .. .. .. .. Papua New Guinea 0.3 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Philippines 0.5 1.0 1.1 1.2 1.2 15.5 14.4 13.6 14.7 13.3 14.4 13.9 12.2 14.5 .. Solomon Islands .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Thailand 0.6 0.9 0.7 0.7 0.6 7.8 7.9 8.2 8.0 8.7 8.0 8.3 8.2 9.0 9.0 Vanuatu .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Viet Nam 0.3 0.1 0.1 0.2 .. 2.7 2.5 2.2 .. .. .. .. .. .. .. Europe and Central Asia 0.4 0.6 0.5 0.5 0.5 5.6 5.7 5.6 5.6 5.6 5.6 5.6 5.4 5.5 5.8 Albania 0.5 0.6 0.4 0.5 0.6 6.4 6.4 6.5 6.1 6.2 6.4 5.7 6.4 5.9 .. Armenia 0.4 0.5 0.5 0.4 0.5 4.6 4.7 5.5 5.1 5.5 5.0 5.6 5.7 5.6 5.2 Azerbaijan 0.5 1.0 1.1 1.0 .. 10.1 .. .. .. .. .. .. .. .. .. Belarus 0.1 0.1 0.1 0.1 0.1 1.6 1.8 1.6 1.4 1.3 1.4 1.4 1.3 1.3 1.2 Bulgaria 0.3 0.4 0.3 0.4 0.4 4.1 4.5 4.4 4.5 4.3 4.5 4.6 4.1 4.2 4.6 Georgia 0.2 0.5 0.4 .. .. .. .. .. .. .. .. .. .. .. .. Hungary 0.3 0.5 0.5 0.5 0.5 5.7 5.6 5.1 5.5 5.5 5.7 5.4 5.2 5.4 5.7 Kazakhstan 0.5 0.8 0.7 0.5 0.4 5.2 5.1 4.8 4.5 5.5 4.6 4.7 5.2 5.3 5.9 Kyrgyz Republic 0.8 1.2 0.9 0.9 1.0 11.3 10.2 10.2 10.5 12.9 10.3 11.1 10.6 11.6 16.6 Macedonia, FYR 0.4 0.4 0.3 0.4 0.4 5.0 4.6 4.7 4.6 .. 4.6 4.2 .. .. .. Moldova 0.3 0.5 0.4 0.5 0.5 5.5 5.4 5.6 6.4 .. 6.4 6.0 .. .. .. Romania 0.5 0.9 0.8 0.8 0.8 9.3 9.7 9.2 9.5 8.9 9.5 9.5 9.2 8.5 8.9 Turkey 0.4 0.4 0.3 0.4 0.4 5.0 5.1 5.4 5.3 5.2 5.1 5.2 4.8 5.2 5.4 Ukraine 0.4 0.5 0.4 0.3 .. 3.1 .. .. .. .. .. .. .. .. .. Uzbekistan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Latin America and the Caribbean 0.5 0.8 0.7 0.8 0.7 8.9 8.8 8.8 8.8 8.7 9.3 8.9 8.5 8.7 9.0 Argentina 1.0 0.9 0.6 0.6 0.4 6.3 5.5 5.5 5.0 4.1 4.8 5.1 4.3 3.9 4.2 Belize 0.2 0.3 0.3 0.3 .. 4.0 .. .. .. .. .. .. .. .. .. Bolivia 0.8 1.5 1.3 1.4 1.4 15.9 16.4 16.3 15.1 15.1 15.9 14.6 14.7 13.0 17.6 Brazil 1.0 1.6 1.5 1.7 1.5 18.5 18.6 18.4 18.2 18.1 20.3 18.0 17.1 17.4 19.8 Colombia 0.7 0.7 0.6 0.6 0.7 7.7 8.1 8.4 8.4 8.1 8.7 8.2 8.2 8.0 .. Costa Rica 0.3 0.3 0.3 0.4 0.4 4.7 5.1 5.1 4.9 4.8 4.9 5.0 4.9 4.9 4.5 Dominica 0.3 0.3 0.4 0.5 0.4 5.0 5.3 5.4 4.8 .. 4.8 5.1 .. .. .. Dominican Republic 0.1 0.2 0.2 0.2 .. 2.1 .. .. .. .. .. .. .. .. .. Ecuador 0.2 0.1 0.1 0.0 0.1 1.0 1.3 1.3 1.4 1.4 1.4 1.6 1.3 1.4 1.3 El Salvadore 0.3 0.3 0.2 0.3 .. 3.3 3.2 3.2 .. .. .. .. .. .. .. Guatemala 0.4 0.5 0.4 0.4 0.5 5.9 5.8 5.5 5.7 5.6 5.7 6.2 5.2 5.7 6.0 Guyana 0.4 0.5 0.4 0.5 .. 5.4 .. .. .. .. .. .. .. .. .. Haiti 0.2 0.4 0.4 0.4 .. 5.5 4.3 .. .. .. .. .. .. .. .. Honduras 0.4 0.4 0.3 0.3 0.3 3.6 3.9 3.3 3.3 3.9 2.9 3.8 3.9 4.0 .. Jamaica 0.4 0.5 0.4 0.3 0.3 3.0 3.8 3.6 3.4 3.6 3.4 3.3 3.6 .. .. Mexico 0.3 0.5 0.5 0.5 0.6 5.3 5.1 5.4 5.6 5.7 5.8 5.5 5.5 5.7 5.7 Nicaragua 0.3 0.4 0.4 0.3 0.4 4.3 3.9 3.9 4.1 .. 4.0 4.1 .. .. .. Panama 0.3 0.3 0.2 0.2 .. 2.2 .. .. .. .. .. .. .. .. .. Paraguay 0.4 0.4 0.4 0.4 .. 4.8 .. .. .. .. .. .. .. .. .. Peru 1.2 1.5 1.3 1.5 1.5 18.4 18.8 18.6 18.9 18.4 19.1 19.6 18.0 18.8 18.3 St. Lucia .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. St. Vincent and the Grenadines .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Venezuela, Bolivarian Rep. of 0.8 0.4 0.3 0.2 0.1 1.8 1.7 1.6 1.5 .. 1.5 1.6 .. .. .. Middle East and North Africa 1.2 1.4 1.3 1.2 .. 14.2 .. .. .. .. .. .. .. .. .. Algeria 2.8 4.0 3.9 3.7 .. 38.0 .. .. .. .. .. .. .. .. .. Egypt 1.0 0.6 0.3 0.2 0.2 1.9 2.4 3.4 2.9 3.0 2.6 2.8 3.0 .. .. Iran, Islamic Rep. of .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Jordan 0.7 0.8 0.6 0.4 0.6 5.3 6.1 5.9 7.2 7.5 7.6 7.5 7.1 7.8 .. Lebanon 1.3 2.0 2.0 2.1 .. 21.7 .. .. .. .. .. .. .. .. .. Morocco 0.8 0.6 0.4 0.4 0.4 4.6 4.5 4.5 4.7 4.7 4.7 5.0 4.7 .. .. Syrian Arab Republic .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tunisia 0.3 0.4 0.3 0.3 0.3 3.7 3.4 3.5 3.7 3.6 3.6 3.6 3.6 .. .. Yemen 1.1 0.6 0.4 0.4 .. 4.4 .. .. .. .. .. .. .. .. .. 126 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Years of imports covered Average months covered per quarter Months of imports covered 2013 2014 2013 2014 00-09a 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Nov Dec Jan Feb Mar South Asia 0.9 0.7 0.5 0.5 0.5 6.0 6.1 6.3 6.8 6.9 6.8 6.9 6.9 7.1 6.6 Bangladesh 0.5 0.4 0.2 0.4 0.5 4.5 4.9 5.1 5.3 5.6 5.3 5.3 5.3 5.8 .. India 1.0 0.8 0.6 0.6 0.6 6.4 6.7 6.9 7.5 7.6 7.6 7.6 7.8 7.9 7.2 Nepal 0.8 0.8 0.7 0.7 0.8 8.8 8.4 7.7 8.7 .. 9.2 8.9 .. .. .. Pakistan 0.4 0.4 0.3 0.2 0.1 2.5 2.0 1.6 1.4 1.5 1.2 1.5 1.2 1.4 1.8 Sri Lanka 0.3 0.5 0.3 0.3 0.4 4.1 3.7 3.5 4.2 .. 3.8 4.5 .. .. .. Sub-Saharan Africa 0.5 0.6 0.5 0.6 .. .. .. .. .. .. .. .. .. .. .. Angola 0.5 1.3 1.7 1.6 .. 20.1 .. .. .. .. .. .. .. .. .. Benin 0.6 0.2 0.1 0.1 .. 0.8 .. .. .. .. .. .. .. .. .. Botswana 2.3 1.4 1.1 0.9 1.1 12.9 15.0 14.8 13.0 .. 14.8 11.9 .. .. .. Burkina Faso 0.6 0.6 0.4 0.4 .. 3.9 .. .. .. .. .. .. .. .. .. Burundi 0.4 0.7 0.4 0.4 0.4 4.4 4.1 4.5 5.0 4.6 4.7 5.2 4.8 4.5 .. Cameroon 0.5 0.8 0.6 0.5 .. .. .. .. .. .. .. .. .. .. .. Cabo Verde 0.4 0.5 0.3 0.5 .. .. 6.8 .. .. .. .. .. .. .. .. .. Chad .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Comoros 0.7 0.7 0.7 0.8 .. 10.1 .. .. .. .. .. .. .. .. .. Congo, Democratic Rep. 0.1 0.3 0.2 0.3 .. 3.0 .. .. .. .. .. .. .. .. .. Congo, Rep. 0.5 1.4 1.3 1.3 .. .. .. .. .. .. .. .. .. .. .. Cote d'Ivoire 0.4 0.4 0.7 0.5 .. 5.5 .. .. .. .. .. .. .. .. .. Eritrea .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Ethiopia 0.3 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Gabon 0.4 0.6 0.6 0.6 .. .. .. .. .. .. .. .. .. .. .. Gambia 0.2 0.2 0.2 0.2 .. 2.6 .. .. .. .. .. .. .. .. .. Ghana 0.2 0.4 0.3 0.3 .. 3.1 .. .. .. .. .. .. .. .. .. Guinea 0.1 0.0 0.0 .. .. .. .. .. .. .. .. .. .. .. .. Guinea-Bissau 0.5 0.6 0.6 0.5 .. 6.0 .. .. .. .. .. .. .. .. .. Kenya 0.3 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Lesotho 0.5 0.5 0.4 0.5 .. 6.2 6.9 6.9 .. .. .. .. .. .. .. Madagascar 0.3 0.4 0.4 0.4 .. 3.9 .. .. .. .. .. .. .. .. .. Malawi 0.2 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mali .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Mauritania 0.1 0.1 0.1 0.2 .. .. 2.9 .. .. .. .. .. .. .. .. .. Mauritius 0.5 0.6 0.5 0.5 .. 7.4 .. .. .. .. .. .. .. .. .. Mozambique 0.5 0.6 0.3 0.3 .. 3.2 .. .. .. .. .. .. .. .. .. Namibia 0.2 0.3 0.3 .. .. .. .. .. .. .. .. .. .. .. .. Niger 0.4 0.5 0.4 0.7 .. 6.8 .. .. .. .. .. .. .. .. .. Nigeria 1.1 0.7 0.6 0.8 .. .. .. .. .. .. .. .. .. .. .. Rwanda 0.8 .. .. .. .. .. .. .. .. .. .. .. .. .. .. Senegal .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Seychelles 0.1 0.3 0.2 0.3 .. 2.8 .. .. .. .. .. .. .. .. .. Sierra Leone 0.4 .. .. .. .. .. .. .. .. .. .. .. .. .. .. South Africa 0.3 0.5 0.4 0.4 0.4 5.3 5.0 5.1 5.4 5.6 5.5 5.4 5.3 5.8 5.6 South Sudan .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Sudan 0.2 0.1 0.0 0.0 0.0 0.3 0.2 0.3 0.3 .. 0.3 0.3 .. .. .. Swaziland .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Tanzania 0.7 0.5 0.3 0.4 .. 4.0 4.7 4.3 4.3 .. 4.0 .. .. .. .. Togo .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. Uganda 0.8 0.6 0.5 0.6 .. 8.5 7.5 7.5 7.4 .. .. .. .. .. .. Zambia 0.3 0.4 0.3 0.4 .. 4.4 .. .. .. .. .. .. .. .. .. Zimbabwe 0.1 0.2 0.1 0.1 .. 1.4 .. .. .. .. .. .. .. .. .. a. Average years of imports covered by stock of total reserves during period 2000-2009 Source: World Bank, IFS, Haver Analytics 127 EMBARGOED: Not for newswire transmission, posting on websites, or any other media use until June 10, 2014, 7:00pm EDT (June 11, 12:00am GMT) Table A1.15 Commodity Price Indices (2010 as Base Year) Annual average index Quarterly average index Monthly Index 2013 2014 2013 2014 a 00-09 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Dec Jan Feb Mar Apr May Energy 66.5 100.0 128.7 127.6 127.4 128.6 123.1 130.2 127.7 128.3 129.5 126.6 130.9 127.4 128.4 128.9 Coal, Australia 53.0 100.0 122.7 97.4 85.4 93.9 87.0 78.1 82.9 77.9 85.2 82.5 77.1 74.1 73.6 74.5 Crude oil, average 62.2 100.0 131.6 132.9 131.7 133.0 125.7 135.9 132.2 131.1 133.5 129.2 132.6 131.6 132.7 133.7 Natural gas, Europe 78.0 100.0 126.9 138.4 142.2 142.8 149.2 138.7 138.1 135.8 139.4 139.8 136.3 131.3 129.5 123.1 Non-energy 65.2 100.0 119.8 109.5 101.7 107.2 101.7 99.2 98.6 99.2 98.6 97.8 99.8 100.0 100.0 99.9 Agriculture 66.3 100.0 121.6 114.5 106.3 110.1 107.3 104.3 103.6 105.5 103.4 102.3 106.1 108.2 107.3 107.5 Beverages 57.2 100.0 116.0 92.6 83.3 84.5 83.3 82.2 83.1 94.5 84.8 85.8 94.6 103.2 106.1 105.1 Cocoa 56.2 100.0 95.1 76.3 77.8 70.5 73.6 78.8 88.4 94.2 90.2 90.0 95.5 97.1 97.4 96.7 Coffee, arabica 50.6 100.0 138.3 95.2 71.2 77.7 74.0 69.0 64.1 88.5 64.3 67.7 88.6 109.3 114.0 109.3 Coffee, robusta 70.7 100.0 138.7 130.6 119.6 131.2 123.5 117.3 106.4 122.3 111.6 111.4 121.8 133.8 134.0 130.8 Food 68.1 100.0 122.5 124.5 115.6 120.7 117.4 113.2 111.2 111.9 110.5 108.7 113.1 114.0 112.5 113.2 Fats and oils 64.5 100.0 120.5 126.1 115.9 117.8 112.7 113.8 119.2 120.1 120.1 117.9 123.1 119.4 117.1 117.4 Palm oil 57.9 100.0 124.9 110.9 95.1 94.7 94.4 91.8 99.6 101.2 101.2 96.0 100.8 106.7 101.1 99.2 Soybean meal 67.7 100.0 105.2 138.5 144.1 140.3 139.6 145.8 150.6 153.7 149.1 149.8 157.0 154.3 149.6 152.9 Soybeans 68.4 100.0 120.2 131.5 119.7 125.9 112.3 117.2 123.4 122.8 126.3 125.8 131.4 111.2 114.7 115.9 Grains 70.8 100.0 138.2 141.3 128.2 143.6 138.3 121.6 109.5 110.1 107.6 105.5 110.3 114.5 113.1 112.9 Maize 68.2 100.0 156.9 160.5 139.5 164.0 156.7 130.1 107.3 112.9 106.2 106.5 112.6 119.6 119.6 116.9 Rice, Thailand, 5% 63.9 100.0 111.1 115.2 103.5 115.0 110.8 97.6 90.5 90.7 92.2 92.0 93.9 86.3 80.8 79.4 Wheat, US, HRW 82.4 100.0 141.5 140.1 139.7 143.7 140.3 136.8 137.8 132.9 130.4 123.2 130.7 144.7 145.3 149.7 Other food 70.6 100.0 111.1 107.1 103.9 104.0 104.7 104.7 102.4 102.8 100.4 99.5 102.5 106.6 106.0 108.0 Bananas, US 70.0 100.0 111.5 113.3 106.4 107.1 104.5 107.5 106.6 109.2 106.3 106.6 109.9 111.1 107.1 105.4 Sugar, world 48.7 100.0 122.1 101.2 83.1 87.1 82.2 80.3 82.8 78.5 77.7 73.4 78.0 84.1 82.7 85.8 Raw materials Cotton ("A" Index) 56.8 100.0 145.8 86.1 87.3 86.8 89.5 88.7 84.2 90.7 84.5 87.8 90.8 93.6 91.0 89.5 Rubber, Singapore 40.3 100.0 132.0 92.4 76.5 86.4 79.5 70.9 69.2 61.6 70.0 63.7 58.7 62.4 60.1 56.7 Sawnwood, Malaysia 78.3 100.0 110.7 103.3 100.5 99.6 98.7 99.7 104.1 106.3 105.3 105.8 106.4 106.8 107.6 108.2 Fertilizers 70.4 100.0 142.6 137.6 113.7 128.9 119.8 108.2 97.9 102.5 98.2 102.4 104.2 100.8 95.0 96.3 Triple superphosphate 68.4 100.0 140.9 121.0 100.0 113.9 111.6 95.8 78.9 95.8 78.2 84.3 101.5 101.6 97.2 95.6 Metals and minerals 62.3 100.0 113.5 96.1 90.8 98.7 88.2 87.8 88.5 85.7 88.7 88.1 86.2 83.0 85.5 84.8 Aluminum 86.7 100.0 110.5 93.1 85.0 92.0 84.5 82.0 81.3 78.7 80.1 79.5 78.0 78.5 83.3 80.6 Copper 52.1 100.0 117.2 105.7 97.3 105.1 95.0 94.0 95.1 93.3 95.8 96.8 94.9 88.3 88.6 91.5 Gold 42.7 100.0 128.1 136.3 115.3 133.2 115.5 108.5 103.8 105.6 99.7 101.6 106.1 109.1 106.0 105.2 Nickel 71.9 100.0 105.1 80.5 68.9 79.3 68.6 64.0 63.8 67.2 63.8 64.7 65.1 71.9 79.7 89.0 Memo: Crude Oil (US$) 49.2 79.0 104.0 105.0 104.1 105.1 99.3 107.4 104.5 103.7 105.5 102.1 104.8 104.0 104.9 105.7 Source: World Bank a. Average of price index for the period 2000-2009 128