tops previous peak in 2007 increase in reserves in last 12 ... - world...

Developing Trends: October 2010

Overview

Developing Trends was prepared by the Development Economics Prospects Group (DECPG) with colleagues from PRMTR and IFC (Risk/

Economics). The team is comprised of Mick Riordan (OECD, currencies), Jean-Pierre Chauffour, Mariem Malouche, Stacey Chow and

Deborah Winkler (trade), Shane Streifel (commodities), Eung Ju Kim (finance), Allen Dennis (IP) and Sabah Mirza (Annex). The report was

prepared under the guidance of Andrew Burns of DECPG. This note reflects the views of the team, but is not formally cleared by the

World Bank Group.

Production and trade growth have slowed brutally. After a period of very rapid, sustained growth that brought economic activity back to pre-crisis levels as of March 2010, global industrial production and trade have been stagnant over the last three months—and even declining in several countries and regions. This likely represents a pause in growth following a degree of overshooting in activity levels. The most likely sce-nario remains one of a return to steady growth in line with domestic demand indicators, which, though mixed, appear to be stable or strengthening. But should the pause last much longer, it could begin to shape expectations and lead to a more serious slowdown.

Developments in high-income countries are mixed. Domestic demand in the United States has slowed

noticeably in the third quarter; but the overall impact on GDP will be muted by better performance in net exports. In Europe, the recovery appears to have broadened its base, as consumer demand and investment spending strengthen, even as export market demand weakens. Japan, on the other hand may be heading for a double-dip recession, as investment spending and external demand have dropped sharply, and will likely outweigh the benefits of a strengthening in consumer demand. Firming private-sector employment, retail sales and machinery and equipment demand in the United States are positive indicators for the fourth quar-ter. And in Europe, emerging household spending and a broadening of recovery across countries are fa-vourable factors at work.

International capital flows have surged and exchange rate pressures are mounting. Very low inter-

est rates in high-income countries have contributed to a surge of flows into bond and equity markets in de-veloping countries, putting strong upward pressure on the currencies of a number of economies. In aggre-gate, gross bond and equity flows this year have exceeded their levels of 2007; though because bank lend-ing remains very weak, total flows are still 30% below their 2007 peak. Regionally, capital flows are above 2007 levels in East Asia and Latin America — reflecting those region’s easier access to bond markets; and in MENA with stronger banking flows; but down in Europe and Central Asia, South Asia and Sub-Saharan Af-rica. Rising capital flows, including hot money, are generating strong pressures in many developing econo-mies. Real-effective appreciations of more than 20% since 2009 have been experienced in several coun-tries, while reserve accumulation has picked up sharply and currently piling up at a pace that is 175% higher than the 2007 average.

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Sep-09 Dec-09 Mar-10 Jun-10 Sep-10

(2009-2010)/2007 average

Increase in reserves in last 12 months almost tops previous peak in 2007

/1: The change in international reserves depicted above is expressed as a proportion to the average reserve change in 2007, the previous peak year for capital flows. Countries comprising the aggregate include: Brazil, China, Japan, the Philippines, South Africa, Taiwan (Province of China) and Thailand .Source: Thomson/Datastream.

-40

-30

-20

-10

0

10

20

Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10

I P decelerates below historical av erage

DEVDEV ex.CHNHIYL-T Average

October 21, 2010 page 2


Global Indicators

(Percentage change per annum, unless otherwise specified)

2008 2009e 2010f 2011f

GDP volume: World 1.7 -2.1 3.3 3.3 Memo item: World GDP at PPP weights 2.6 -0.8 4.2 4.0 High-income countries 0.5 -3.3 2.3 2.4 Developing countries 5.9 1.8 6.2 6.0 Industrial production: World 0.5 -8.1 ... ... High-income countries -1.7 -12.4 ... ... Developing countries 5.8 1.4 ... ...

Export volume (GNFS): World 2.9 -11.2 11.2 6.8 High-income countries 2.2 -11.8 8.8 6.2 Developing countries 4.7 - 9.5 17.4 8.3 Trade Prices ($): Manufacturing (MUV) 6.7 -4.2 0.0 -3.7 Oil ($/bbl) 97.0 61.8 76.4 73.2

Non-oil commodities 21.0 -21.6 17.8 -4.5

Nominal interest rates: $LIBOR (6m percent p.a.) 3.22 1.15 0.82 1.25

€LIBOR (6m percent p.a.) 4.79 1.52 1.02 1.15 Financial flows FDI ($billion) 583 362 410 438 Gross Capital flowsa ($billion) 390 353 473 402 Equity placement ($bn) 68 109 162 110 Bond financing ($bn) 65 115 194 177 Lending ($bn) 257 129 118 115

Source: DECPG, October, 2010. Estimates and projections for 2009 through 2011 based on GEP-2010 update

of June 9, 2010.

Note: a. Gross inflows 2010 based on preliminary year-to-date figures. Figures in bold represent changes this

month.



OECD Developments

U.S. retail sales more buoyant in the last months, but soften from second quarter. Retail sales ad-justed for inflation picked-up momentum for a third month in September, with nominal sales up 0.7% in the last 2 months (m/m) on purchases of autos, furni-ture and related goods. Despite September’s strength, real sales registered growth of 0.8% (saar) in the third quarter contrasted with 5.4% in the sec-ond, a sharp falloff, but better than financial market expectations. Several elements could provide sup-port for spending in coming months: private sector employment (notably in services) has shown stronger gains since the summer (100,000 per month); equity market rallies are helping to restore wealth lost to households during 2008-09; and unlike develop-ments in Europe, substantial tightening of fiscal pol-icy is not anticipated to provide a headwind for con-sumer spending.

U.S. activity rates fading. Concurrent ISM purchas-ing manager surveys show activity—and notably “hiring intentions”—easing in the last months for both U.S. economic sectors. Manufacturing remains above the “50” threshold for growth/no-growth, but employment prospects have slipped to decline; in services, sales- and especially jobs are well into con-traction. Nevertheless, manufacturing output ex-panded at a 4% annualized pace in the third quarter (saar) above its 3% longer-term trend, but well below the 9% growth of the second quarter. Production continues to benefit from restocking. The I/S ratio for durable goods industries has declined from 1.80 to 1.57 since the start of 2009—though further ad-justment is required to achieve long-term 1.40 rates.

Federal Reserve and “QE2”. Recent talks by Fed Chairman Ben Bernanke have underscored the cen-tral bank’s intention to engage in a second round of quantitative easing, against the background of a weak economy and quiescent inflation. The Fed would like to raise inflation expectations and seeks to lower long term yields by active intervention in the bond markets (short term policy rates are already close to “zero”). Expectations of this action have led to large-scale flows into higher-yielding securities: in EM equities and bonds, precious metals, and com-modities as an asset class. Sharp swings in exchange rates are linked to these flows, and underpin the popular press headlines concerning “currency wars” (see following discussions).

The Federal Reserve’s concerns about the U.S. economy and consideration of QE measures have set financial markets into “search for yield” mode, with attendant sharp shifts in exchange rates. U.S. data suggest that slower consumer spending and a construction falloff will dampen domestic demand in the third quarter; but net exports will be much less negative. Consensus looks for 1.5% growth—of which plus/minus are possible .

-18

-15

-12

-9

-6

-3

0

3

6

9

12

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10

Pe

rcen

t

U.S. real retail spending slows in the third quarter

Source: U.S. Departments of Commerce and Labor.

nominal retail sales, adjusted by the U.S. headline consumer price index. ch% (3m/3m saar)

2010-Q2

2010-Q3

40

43

45

48

50

53

55

58

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10

U.S. activity eases in manufacturing and services

ISM Mfg Headline Mfg Employment

ISM Svc Headline Svc Employment

Source: Institute for Supply Management (ISM).

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10

percent Time for a second round of Quantitative Easing?

Ffunds [L] Tbill 3m [L] TB 6m [L] TN 10 yr [L]

Source: Federal Reserve, U.S. Treasury.



Following the Euro Area’s 3.9% GDP advance in the second quarter, recent data suggest that growth has broadened across countries (as that in Germany eases) with domestic demand gaining traction. Consumer spending is moving to positive growth and business investment may gather momentum in the third quarter. But fiscal austerity and the rapid appreciation of the euro are providing headwinds to the tenor of growth.

Dispersion in European growth. GDP outturns were encouraging for the second quarter, with the Euro Area scoring 3.9% gains (saar), the best quar-terly advance since 2006. Growth was exceptionally strong in Germany and Finland (9-and 8%, respec-tively), but declined sharply in Ireland and Greece. Excluding these 4 countries, GDP would have regis-tered a favorable 2.4%. Despite divergence across countries, aspects of second quarter GDP have set the stage well for developments into the second half of 2010. Investment stepped up to a 6.8% pace, the first positive figure since early 2008. And domestic demand gained 3.2%, in the wake of a 4.3% advance in the preceding quarter. Partly as a result, the IFO survey of German business lofted to highest levels since 2008 in September.

Consumers gain traction. Following a long period of dormancy, Euro Zone retail volumes are now echoing improvements in consumer confidence from -18 in March to -14 in August. Spending is up 1% for the Area as a whole (y/y), driven by strong gains in Germany and France (near 4%), and a pick-up in mo-mentum for Italy and the Netherlands. Labor market conditions have improved in Germany (with the un-employment rate at 6.8%, lowest in 20 years) and in countries closely linked through trade. Better per-formance in European equities may be supplement-ing incomes to support spending. However, fiscal austerity measures coming on-line could serve to slow consumer momentum, while a fairly firm mone-tary policy maintained by the ECB is unlikely to prove supportive of household outlays.

Appreciating euro: threat to exports? The accel-eration in the U.S. dollar’s decline over September and October to date has yielded a 10% gain in the euro-dollar cross rate. And since the start of the dol-lar’s falloff in June, the euro real effective exchange rate had picked up 2 percentage points by August. Though there can be substantial lags in the transmis-sion of exchange rate changes to trade perform-ance—and with other factors at work—German ex-port momentum downshifted by almost 15 points of growth over the same period. Indeed, latest trade data for Germany show a notable gain in shipments to partners within the Euro Area, but a 1.6% decline (m/m) in exports to outside markets. Should euro appreciation continue (and differences in monetary policy between the ECB and the Federal Reserve suggest that it could), Euro Area exports could be hard hit in coming months, removing a degree of momentum from recovery.

-8

-6

-4

-2

0

2

4

6

8

10Euro Area experienced wide dispersion in growth

across countries in the second quarter

Q1-2010 Q2-2010

Source: Eurostat. Note * year on year growth all others 'saar'

-10.5

-8.0

-5.5

-3.0

-0.5

2.0

4.5


European household spending gaining traction... notably in Germany and France

Euro AreaGermanyFranceItalySpainNetherlands

Source: National Authorities through Thomson/Datastream.

retail sales volumes, ch% 3mma, year-on-year

85

88

90

93

95

98

100

103

105

-50

-40

-30

-20

-10

0

10

20

30

40

Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10

Recent euro appreciation may dent the Area's strong export performance

German export volume [L]

Euro REER [R]

Source: Bundesbank, JPMorgan-Chase.

exports, ch% saar [L]; euro REER, Index Jan-2008=100



After Japan’s growth tumbled from 5%-to 1.5% (saar) from the first to the second quarters, the country runs the risk of falling into a “double-dip” recession. Declines in exports, investment and industrial production, and continued rise of the yen, could outweigh a strengthening consumer sector, yielding a GDP decline for the third quarter. The BOJ has reacted by pushing interest rates to “zero” and announcing another round of QE.

Japan’s manufacturing falters. In line with the gradual slowing of global IP, Japanese production declined in the three months through August, carry-ing growth momentum to –3.5% from 30% in the first quarter (saar). In part this reflects the end of the bounce-back gains of the early recovery period. But it is also tied to: (i) substantial deterioration in ex-port performance due to slower demand in Asian markets and the strong yen; and (ii) to weaker in-vestment outlays, as Tankan surveys suggest a scale-back in business capital spending as confidence in overseas sales wanes. Export volumes fell from a 55% surge in the first quarter of 2010 to decline averag-ing 5% in the months to August (saar). But prospects are for exports to stabilize, as orders from abroad are up 15% (saar). Overall, a return to GDP decline in the third quarter, a “double dip” recession for the OECD’s second largest economy, is a real possibility.

Can households fight the downtrend? Retail sales, with support from government stimulus, have bucked the trend decline of activity in the export and manufacturing sectors since late 2009. Sales grew in a 3-4% range over 2010 (y/y); while house-hold expenditure volumes have recently returned to growth (0.4% in August, y/y). Consumer confidence has increased on the back of a falloff in the unem-ployment rate to 5.1% in the month from 5.4% in June, a pick-up in job offers per applicant and sub-stantial improvement in cash wages. But stimulus measures aimed at encouraging consumers to buy energy-efficient autos and home electronics expired in September, and Tokyo consumer confidence sagged in the month, suggesting a more difficult path ahead for spending.

No relief from deflation. Recent Japanese price gauges show worsening deflation, and the trend is being amplified by the continuing strength of the yen. Headline CPI dropped by 0.3% in August (m/m) for a second month running, standing 1% below year-earlier levels, and down 2% on an annualized basis (3m/3m, saar). Continuing gains in the yen (up 6.5% over 2010 to date on a real effective basis) are plac-ing renewed downward pressures on prices at the wholesale level, in part as yen-based import prices have declined 2% in each of the three months to September (m/m). After intervening in foreign ex-change markets in September for the first in six years, the BOJ enacted further changes in October—setting the call money rate to within 0.0-0.1% , while considering new quantitative easing, some ¥5 trillion ($60 billion) in asset purchases to boost overall li-quidity in the economy.

-25

0

25

50

75

100

-5

0

5

10

15

20

25

30

35

Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10

percentpercentJapan's output decline driven by falling

exports and domestic investment

Production [left] Export volumes [right]

Source: Japan Cabinet Office and EPA.

25

27

29

31

33

35

37

39

41

43

45

-6

-4

-2

0

2

4

6


percentpercentJapan's consumer spending in

positive territory

consumer confidence [R] real retail sales [L]real HH spending [L]

Source: Japan EPA.retail sales and spending, ch% 3mma, y/y [L];Country-wide consumer confidence, 3mma [R]

94.0

96.0

98.0

100.0

102.0

104.0

106.0

-4.5

-4.0

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0


yen/usdpercent

Deflation persists.. and yen is further intensifying downward pressure

Headline CPI [L] Core CPI [L] Yen per Dollar [R]

Source: Thomson/Datastream.

CPI measures, ch% (3m/3m) saar [L] ; yen per U.S. dollar [R]



Industrial Production

Industrial production has decelerated sharply. After many months of rapid expansion, global in-dustrial production regained its pre-crisis level in July 2010. But the pace of expansion has deceler-ated rapidly. During the 3 months ending Septem-ber 2010, output grew at a meager 2.3% (3m/3m, saar) pace, below its 2.6% average rate over the period 1990-2010. For high-income economies, annualized growth (3m/3m, saar) remains just be-low historical averages; but for developing coun-tries, the deceleration has been more marked. Ex-cluding China, developing countries industrial pro-duction declined at a 1% annualized rate during the 3-months ending August 2010. While worri-some, the deceleration appears to reflect a tempo-rary pause in growth following overshooting during the bounce-back phase. Demand-side indicators suggest growth will resume in the months ahead.

Strong capital goods output is good for global growth prospects. Continued strong capital goods production in high-income countries (and exports of capital goods to developing countries) augur well for future developments. Capital goods production in Europe and the United States contin-ues to expand rapidly (15.3% and 13.3% respec-tively, saar). As discussed earlier, the downturn in Japan is more worrisome and may portend a third-quarter decline in GDP.

Retail sales weak, but strengthening. The slow-down in retail sales toward the end of the second quarter likely has played a role in the more recent slowing in production growth. Strengthening con-sumer demand in Japan, the United States and Europe should begin to be reflected in production data in coming months. Retail sales in Japan and the U.S have been growing at a 4.0% and 2.3% an-nualized pace. In Europe, retail sales have stayed positive for the past 8 months. Labor market devel-opments should support this trend. In the United States private sector hiring increased 135,000 in August and September, while unemployment in Germany is now below its pre-crisis level; and in Japan, unemployment has ticked down from 5.3% in June to 5.1% in August.

After bouncing back to pre-crisis levels, industrial production growth has slowed sharply and is now expand-ing at less than its historical average rate. Strong capital goods growth has been at the fore-front of the re-bound in industrial production, and this augurs well for global prospects. With high unemployment levels, consumer goods production remains constrained in high-income countries.

Source: World Bank, DECPG

Source: World Bank DECPG

Source: World Bank, DECPG

-6

-4

-2

0

2

4

6

8

10

12

14

Dec-09 Feb-10 Apr-10 Jun-10 Aug-10

Retail sales momentum moving higher

U.S Japan Euro zone

-5

0

5

10

15

20

25

30

Feb-10 Apr-10 Jun-10 Aug-10

Capital goods production decelerates in Japan and Germany (3mm, saar)

EU16 - Capital GoodsJapan - Bus. MachineryU.S Bus. Equipment

-40

-30

-20

-10

0

10

20

Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10

I P decelerates below historical av erage

DEVDEV ex.CHNHIYL-T Average



International Trade

BRICs continue to lead the trade recovery. De-veloping country goods export volumes have led the recovery in global trade. Exports from the BRICs (Brazil, Russia, India and China) have been particularly strong in this process. Indeed, by Au-gust 2010, export volumes for BRIC countries had risen some 10% above pre-crisis levels. China’s vol-umes have stagnated since July, but Brazil’s exports continue to expand. As with industrial production, global trade has tapered off in recent months. With the exception of East Asia and Pacific that recorded strong momentum growth in July, all de-veloping regions experienced sharp downturns, with momentum growth negative for ECA (-17.5%, 3m/3m saar) and South Asia (-23.2%, 3m/3m, saar). The recovery of exports in G3 countries also ta-pered off since March. Services trade more resilient to shocks than goods trade. U.S. merchandise imports fell by more-than 60% by January 2009 (saar), the trough of the import collapse. Imports of autos and com-ponents, along with industrial supplies declined most sharply; food and beverages, consumer and capital goods fell less steeply. In contrast, U.S. ser-vices imports declined 26% by March 2009 and have exceeded pre-crisis levels since February 2010. Demand for business services has proven resilient, in part because it is less cyclical and less dependent on external finance. While imports of autos, consumer and capital goods have picked up again since May 2010, industrial supplies have con-tinued to fall. In July, the latter were still 23% be-low pre-crisis levels. Capital goods imports have reached pre-crisis levels, while consumer goods imports have exceeded them. Diversification into services exports can help reduce trade volatility. Liberalization of services trade remains an important goal to help countries diversify into services and reduce openness-related trade volatility. A World Bank research project is compiling survey data on actual or applied trade policies for services. First results covering 32 devel-oping- and 24 OECD countries suggest that the most restrictive policies in services trade are visible in Asia and MENA as of 2007/08. Though develop-ing countries have liberalized a range of services sectors over the last decades, protection persists, especially in professional services and transport. Services liberalization at the multilateral– or bilat-eral levels could provide new dynamism and greater security of market access.

The BRICs continue to lead the recovery in merchandise exports, though in recent months there has been a slowdown in global trade momentum. Services trade has proven more resilient during the financial crisis, be-ing less cyclical and less dependent on external finance. Reducing trade restrictiveness of services trade poli-cies could help developing countries promote services and reduce trade volatility.

Source: World Bank, DECPG, constant s.a.

Services imports are more resilient than goods imports, saar

Source: US Bureau of Economic Analysis, BP-based and s.a.

Services trade restrictiveness highest in Asia and MENA

surveys from 2007/08

Source: Batshur and Mattoo (2009).

The BRICs continue to lead the world trade recovery

0 10 20 30 40 50

South Asia

Middle East and North Africa

East Asia and Pacific

World

Latin America & the …

Sub-Saharan Africa

Europe & Central Asia

OECD

Restrictiveness of services trade policy

-0.80

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09 Jul-10

U.S. Services and Goods Imports, saar (%)

Goods

Services

40

50

60

70

80

90

100

110

120

Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09 Jul-10

Merchandise exports, constant sa, Jan-08 = 100

BRICs

DEV

USA

DEU

JPN



Commodity Prices

Oil prices rally on weakening dollar and tight distillate market. Crude oil prices (World Bank average) rose above $83/bbl in early October, in part due to the weak dollar. The price in euros, however, has changed little recently. Distillate markets have tightened due to strong demand—notably German consumer heating oil stocking ahead of winter and truck transport in the U.S.—refinery maintenance, and reduced supplies be-cause of a strike at France’s main Mediterranean port. While the distillate shortage may raise prompt demand for light crude, a prolonged strike (which began September 27th) will weigh on crude oil prices, especially with still large stocks. OPEC agreed at its October 14th meeting to leave pro-duction quotas unchanged. Oil demand growth slowing. Growth in world oil consumption was very strong in the first half of 2010, with demand up 1mb/d (quarter-on-quarter seasonally adjusted). Growth was split evenly be-tween OECD and non-OECD regions. OECD oil demand was particularly robust, led by relatively large gains in North America and Europe. China’s quarterly growth slowed from large gains in the last three quarters of 2009, while growth in other non-OECD accelerated, with notable gains in most regions—led by the FSU and MENA. In the third quarter, global oil demand slowed significantly, in line with the drop in industrial production. The OECD shows the sharpest deceleration, while oil demand in China actually fell, partly reflecting ef-forts to increase energy efficiency. Assuming a modest acceleration in the fourth quarter, world oil demand in 2010 is projected to reach 87.3mb/d, about 1% higher than the pre-crisis peak of 2007. Crude oil forward price curve flattens as float-ing storage shrinks, but on-land stocks remain high. WTI crude oil futures prices on the NYMEX have oscillated with spot prices in 2010, with the recent forward curve not too different from the start of the year. However the curve has moved into less-steep contango (near-by prices lower than future prices) as crude oil inventories at sea have fallen by more than half from 93 million barrels at end-May (when steep contango was required to profitably store oil in tankers). However, crude stocks on-land remain high, especially in the U.S. Product inventories also remain high on-land and at-sea, particularly middle distillates, but a lengthy strike in France could pull product stocks lower. However the strike will also reduce crude demand, tying up tankers laden with oil and worsening the surplus.

Oil prices rose above $83/bbl in October on depreciating dollar and strong demand. A tight distillate market, partly due to a port strike in France, has lifted product prices, but a prolonged strike could weigh on crude prices. Oil demand growth is slowing in the third quarter of 2010, but with the U.S. and China accounting for over half the growth this year. Stocks for crude and products remain high, especially in the United States.

0

20

40

60

80

100

120

140

160

Jan-07 Jan-08 Jan-09 Jan-10

Oil price in dollars and euros

$/bbl

WB average

euros/bbl

60

70

80

90

100

Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

WTI Crude Oil Futures Prices - NYMEX

$/bbl

Apr 30

Oct 18

Dec 31 09

May 25

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10

Growth in world oil demand sa q/q

Other

Other Asia

China

OECD

World

mb/d



Agriculture prices rise on impact of extreme weather and an outlook for reduced supply. Agriculture prices have increased sharply in recent months from summer drought in Russia, heavy rains in Asia, Central America and Canada, disappointing yields in Australia and Europe, and dry weather concerns in Brazil. Corn prices have surged, with the latest boost coming from the USDA’s signifi-cant cut to its estimate of corn yields, and as re-newed China import demand further tightens the market. Soybeans prices have rallied on strong de-mand and forthcoming competition for acreage in the United States following the wheat and corn rallies. Wheat prices have plateaued in the last month following a spike this summer. But, sugar and cotton prices have surged because of unfavor-able weather in a number of producing countries.

Metals prices increase on falling stocks and supply constraints. Base metals prices have risen sharply in the past three months on lower invento-ries and supply constraints, notably for tin and cop-per. However, all metals prices have increased re-cently on the weak dollar. Tin prices have breached all-time highs, up 55% since end-June, due to a further decline in stocks, strong demand, and pro-duction declines in Indonesia linked to heavy rains. Copper prices as well are beginning to approach earlier highs on a steady decline in stocks, stagnant mine production, and concerns about future supply growth needed to meet robust demand in emerg-ing markets. All other base metals remain well be-low previous peaks due to high stocks and ample supplies, with lead and zinc prices down slightly over the year-to-date.

Precious metals prices surge on strong invest-ment demand and the weak dollar. Prices of precious metals have skyrocketed on strong invest-ment demand because of various macroeconomic-financial-currency concerns. It has prompted inves-tors to seek physical or physically-backed com-modity assets, such Exchange Traded Funds (ETFs), as a hedge against inflation and other perceived risks. Precious metals are the most easily stored, but there are reports of physically-backed ETFs being created for all of the base metals. Silver prices in dollar terms have risen most sharply among precious metals, up more than 1/3 in the last two months, as silver also has many industrial uses. Gold prices have risen less rapidly, as the metal is used little outside of jewelry fabrication, but prices have breached $1,375/toz and could rise higher should the dollar continue to weaken.

Agriculture prices have risen on extreme weather in many countries this year. Corn prices have surged on sig-nificant downgrades to U.S. yields, while soybean prices are rising on forthcoming acreage competition. Tin and copper prices have increased sharply on supply constraints, while precious metals prices are surging on strong investment demand for physical assets due to various macro-financial-currency concerns.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800


Wheat, corn, soybeans prices Continuous futures - CBOT

Soybeans

cents/bushel

Corn

Wheat

0

5

10

15

20

25

30

0

5,000

10,000

15,000

20,000

25,000

30,000


Tin price and LME stocks$/ton

Tin price

Stocks [RHS]

'000 tons

5

10

15

20

25


Silver price in dollars and euros

$/toz

euros/toz



International Finance

Flows surge in September. Capital flows increased sharply in September, led by a surge in both bond and equity flows. Bond issuance in the month re-bounded sharply from summer lulls, as corporate borrowers (mostly from Latin America) increased ac-tivity. Year-to-date bond flows have already sur-passed the robust yearly total for 2009. Strong bond flows may reflect substitution for subdued bank lending. October is likely to be another strong month, should market conditions remain favorable, as there is a large sovereign issuance pipelines. Equity place-ments were boosted by the world largest equity sale from Brazilian oil company Petrobras. Overall, year-to-date capital flows are up 70% versus the like pe-riod of 2009. However, total flows are still 30% be-low levels during the same period of 2007 as bank lending remains 50% below pre-crisis levels.

Boom in flows is evident in some regions. The shifting pattern of private capital flows following the global credit crisis—bonds and equities up, bank loans down—has had an important implication for the re-gional composition of flows. Total flows are up in Latin America and the Caribbean (LAC), East Asia and the Pacific (EAP), and the Middle East and North Af-rica (MENA), compared with pre-crisis boom levels in 2007. This is largely due to a surge in bond and eq-uity flows—though in MENA this is due to a stronger rise in bank-than bond flows. But the composition of surging capital flows has been less beneficial for other regions as bank lending remains subdued. This is particularly evident for Europe and Central Asia (ECA) where bank loans were a major source of fi-nancing for the private sector’s hard-currency needs. Total flows to South Asia (SA) and Sub-Saharan Af-rica (SSA) are also down, with all segments of flows deteriorating compared to pre-crisis levels.

EM assets have enjoyed strong demand. Emerging market bond and equity funds have seen strong in-flows this year, with combined year-to-date flows of $116 billion. EM Exchange Traded Funds (ETF) seem to be receiving robust inflows as well. Foreign capital movements into EM bond funds have enjoyed the largest inflows of all major fund categories thus far this year. Local currency funds have attracted inflows of $36 billion year-to-date, contrasted with $26 bil-lion for hard currency bond funds. Investor’s prefer-ence for EM assets has both contributed to and was attracted by expectations of currency appreciation. Meanwhile, facing heavy flows of foreign capital, some EM governments have intervened in foreign exchange markets and restricted portfolio inflows, episodes in the global “currency war.”

Capital flows into developing countries surged in September. Year-to-date flows are up significantly from the like period of last year, with bond flows having reached record levels. Total flows have rebounded to pre-crisis boom levels in some regions, but the composition of flows varies widely across regions. Foreign purchases of EM assets has been robust this year, with inflows to EM bond funds reaching record levels.

Capital flows to emerging markets surged in September

$ billion 2008

Total H1 Q3 TotalJan-Sep H1 Q3 Aug Sep YTD

Total 390 110 99 353 209 189 166 26 88 355

Bonds 65 36 33 115 69 87 59 9 27 146

Banks 257 43 34 129 77 45 43 14 15 88

Equity 68 32 32 109 64 57 65 3 47 121

Lat. America 90 37 37 137 74 64 63 5 47 128

Bonds 20 15 18 62 33 36 31 5 15 67

E. Europe* 157 22 21 72 43 53 33 4 14 86

Bonds 35 13 11 33 23 31 17 1 7 48

Asia 98 44 33 122 77 58 59 14 24 117

Bonds 7 6 3 16 9 14 8 3 3 23

Others 45 7 9 22 16 14 10 3 4 24

* Including Poland

2009 2010

0

20

40

60

80

100

120

140

160

EAP ECA LAC MENA SA SSA

Equity Bond Bank

Capital flows rebound to pre-crisis levels in some regions

$ billion

* For the first nine months of the year

2007*

2010*

-50

-30

-10

10

30

50

70

2006 2007 2008 2009 2010 YTD

EM Equity funds

EM Fixed-income funds

Inflows to EM asssets have been robust this year

$ billion



Currencies

Dollar slide continues. Depreciation of the green-back picked up speed over the course of the month to mid-October, as interest differentials in the euro-markets moved further in favor of the euro. 3-month Libor interest rates now favor euro denominated as-sets by a full 65 basis points, up 25 points since begin-September. The earlier surge in the value of the yen was met by BOJ intervention for the first in six years on September 15. But since that time the yen has resumed it appreciation and picked-up an additional 5% vis-à-vis the U.S. unit. The driving factor in this development is market perceptions of differences in monetary policy between the Federal Reserve and the ECB, and a widening of such difference with the Fed’s expected introduction of “QE2”. Many emerg-ing market currencies have appreciated sharply, as funds have left low-yielding U.S. dollar assets for higher returns.

“Currency wars”. The search for yield dynamic in international markets at present has carried substan-tial effects across key emerging market currencies, as well as “commodity currencies” of countries such as Australia and Canada. The Korean won has picked up 7% against the dollar since September-1; the Austra-lian dollar 12%, and Thai baht and Philippine peso 5%. This has shaped the profiles of recent move-ments in real effective exchange rates (REER), impor-tant determinants of the export competitiveness of an economy. Among major REER rates, that of the Brazilian real has skyrocketed 12% since the start of 2010, followed by the Thai baht and yen (6%). The Chinese yuan has gained (1.6%). Efforts to contain appreciation have been widespread, with Brazil, for example, imposing– and raising tax on foreign in-vestments in fixed income securities; Thailand, Indo-nesia and Korea have implemented restrictions on foreign portfolio investment flows into local markets.

Strong run-up in reserves. A number of countries have attempted to “lean against the wind” of cur-rency appreciation by entering foreign exchange markets to counter market forces. Selling local cur-rency for dollars increases international reserve posi-tions. Without direct market evidence of foreign ex-change intervention, reserve accumulation in the 12 months to September has been exceptionally large for several countries (see footnote to chart)—having accumulated to $595 billion vis-à-vis $765 billion in 2007—and intensifying in recent weeks to a pace 175% higher than in 2007. China accounted for the bulk of accumulation over the last year (88%), fol-lowed by Japan and Brazil (13%), and Korea (8%).

The dollar’s sharp decline versus the majors—7% against the euro and 5% vis-à-vis yen since September 15th—is connected to current and anticipated differences in monetary policy between the Federal Reserve and the ECB. Markets have viewed the Fed’s “QE2” as a given, and moved aggressively to seek higher yields in EM and other assets, lofting currency values across a wide range of countries.

79.0

81.0

83.0

85.0

87.0

89.0

91.0

93.0

95.0

97.0

0.68

0.70

0.72

0.74

0.76

0.78

0.80

0.82

0.84

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10

yen/usdeuro/usdDollar decline since early September has been

virulent against the majors: 10% vs euro; 5% vs yen

euro per dollar (left)

yen per dollar (right)

Source: Thomson/Datastream.

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Sep-09 Dec-09 Mar-10 Jun-10 Sep-10

(2009-2010)/2007 average

Increase in reserves in last 12 months almost tops previous peak in 2007

/1: The change in international reserves depicted above is expressed as a proportion to the average reserve change in 2007, the previous peak year for capital flows. Countries comprising the aggregate include: Brazil, China, Japan, the Philippines, South Africa, Taiwan (Province of China) and Thailand .Source: Thomson/Datastream.



Average 2009 2010 20101999-08 2007 2008 2009 Q3 Q4 Q1 Q2 May Jun Jul Aug

World 2.8 4.8 0.5 -8.0 11.6 11.7 11.7 11.1 0.2 0.6 -0.6 0.6High-income countries 1.4 2.8 -1.7 -12.3 10.9 9.6 9.6 9.9 0.2 0.7 -0.9 0.8

Industrial countries 1.4 3.1 -2.2 -12.6 11.1 8.7 8.7 11.3 0.1 0.9 -1.0 0.9United States 1.3 2.7 -3.3 -9.3 7.8 6.8 6.8 9.1 1.0 0.0 0.7 -0.4Japan 1.1 2.8 -3.0 -21.5 24.0 26.7 26.7 26.0 -2.3 2.6 -2.4 1.1Euro Area 1.2 3.5 -1.7 -14.6 9.4 5.6 5.6 6.5 0.1 0.7 -2.3 3.3United Kindgom -0.4 0.4 -2.9 -10.3 -2.7 0.3 0.3 7.7 -0.8 2.0 -1.8 ..

Other high income 2.1 5.3 1.5 -6.9 16.0 4.2 4.2 10.5 0.8 1.1 -0.8 -0.8Hong Kong (China) .. -1.5 -6.6 -8.4 -6.1 1.8 1.8 11.1 0.0 -0.3 .. ..Singapore 6.3 6.2 -4.0 -4.4 29.9 -24.7 -24.7 149.0 10.2 -21.0 -4.2 -4.6Taiwan (China) 4.7 8.2 -1.4 -8.3 41.8 49.9 49.9 28.1 0.1 0.3 -0.8 0.7

Developing countries -210.3 9.5 5.7 1.4 13.0 15.8 15.8 13.5 0.1 0.3 0.0 0.3East Asia and Pacific 20.8 15.1 10.8 8.5 15.2 18.8 18.8 19.4 0.4 0.6 -0.2 1.2

China 15.2 18.0 12.7 11.2 17.0 18.2 18.2 20.3 0.6 0.5 0.0 1.4Indonesia 3.4 5.6 3.0 1.4 -3.5 14.8 14.8 5.4 -0.2 0.6 -1.2 -0.4Thailand 8.6 8.2 5.4 -5.2 15.3 44.6 44.6 26.4 -3.8 5.0 -2.5 ..Malaysia 5.8 1.2 0.8 -7.8 11.6 12.3 12.3 13.1 0.3 -1.6 -3.0 0.0

Europe and Central Asia 5.1 6.8 0.1 -10.0 12.8 18.0 18.0 6.6 -0.1 -0.5 -0.9 0.1Russian Federation 5.5 7.0 0.8 -9.5 11.6 14.3 14.3 7.6 1.0 -0.9 -1.7 -0.1Turkey 3.7 7.1 -0.3 -10.2 12.7 26.7 26.7 11.4 -0.8 0.4 -0.1 ..Poland 6.3 9.3 2.8 -4.0 8.0 8.0 8.0 12.0 2.7 1.9 -2.4 2.4Czech Republic 4.8 10.6 -1.7 -13.8 19.8 4.7 4.7 6.8 0.9 1.2 -3.0 ..

Latin America and Caribbean 1.5 3.9 0.9 -6.9 11.2 11.2 11.2 6.1 -0.1 0.3 -0.9 1.0Brazil 3.3 6.0 3.2 -7.5 19.7 23.8 23.8 16.2 -1.0 -1.4 -0.7 0.3Mexico .. 1.9 -0.5 -7.3 8.9 11.9 11.9 4.3 -0.1 0.9 -0.3 1.0Argentina 2.7 6.7 0.9 -5.0 16.5 5.9 5.9 11.2 -0.4 2.7 -3.0 1.9Colombia 2.7 10.9 -2.7 -6.2 4.6 3.5 3.5 10.0 -0.4 -0.1 -4.3 ..

Middle East and North Africa 1.6 1.7 3.1 -3.1 1.5 4.7 4.7 5.5 -0.3 0.1 -1.1 ..Saudi Arabia 1.0 -4.7 6.2 -10.9 3.6 1.3 1.3 3.0 0.5 -0.3 -0.5 ..Iran 1.1 -2.9 3.5 -0.3 -1.4 2.5 2.5 4.4 0.0 -0.3 -0.2 ..Egypt .... .. .. .. .. .. .. .. .. .. .. ..Algeria 3.9 1.1 -0.5 -2.4 8.4 -2.0 -2.0 5.0 0.0 -0.1 -0.4 ..

South Asia 6.8 9.1 4.1 5.4 18.6 12.8 12.8 10.0 -1.0 -0.1 6.4 -6.4India 6.7 9.9 4.4 6.7 18.6 12.8 12.8 11.8 -1.2 -0.1 7.1 -6.4Pakistan 6.7 5.5 -0.7 -4.9 16.3 13.9 13.9 -1.5 0.9 0.6 0.1 ..Bangladesh .. 5.6 .. .. .. .. .. .. .. .. .. ..Sri Lanka .... .. .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. 5.3 1.0 -6.7 3.3 16.8 16.8 13.5 0.0 0.5 -0.7 ..South Africa 2.5 4.6 0.8 -12.8 5.9 18.2 18.2 4.0 -0.7 0.8 -0.2 -2.9Nigeria .. -3.7 -7.8 1.9 -12.8 30.2 30.2 29.4 2.3 1.8 -1.2 ..

Memo:OECD 1.5.. .. .. .. .. .. .. .. .. .. .. ..Developing excl. China 3.5 5.0 1.6 -5.1 10.0 13.9 13.9 8.2 -0.4 0.2 0.0 -1.0Developing oil exporters 0.8 3.6 0.5 -5.6 6.1 9.7 9.7 6.8 0.2 0.0 -1.2 0.4Dev. non-oil exporters -213.7 12.8 8.4 4.6 16.1 18.4 18.4 16.3 0.1 0.5 0.5 0.3Asian high tech exporters .... .. .. .. .. .. .. .. .. .. .. ..

Table A.1 Global industrial production growth(constant prices; percent; seasonally adjusted annual rates except monthly figures which are in percent change over previous month a/)

a In general, series refer to industrial production excluding construction (e.g. manufacturing, mining and utilitites). Where this is not available the closest proxy is used, often manufacturing output or oil output, if the country is a major oil producer.



Weights

Average 2009 2010 20101995 1999-08 2007 2008 2009 Q3 Q4 Q1 Q2 Jun Jun Jul Aug

Real GDP

High-income countries .. 2.3 2.6 0.3 .. .. .. .. .. .. .. ..Industrial countries .. 2.3 2.5 0.3 .. .. .. .. .. .. .. ..

United States .. 2.6 2.1 0.4 .. 1.6 5.0 3.7 1.6 .. .. .. ..Japan .. 1.3 2.3 -1.2 .. -0.3 3.4 5.0 1.5 .. .. .. ..Euro Area .. 2.0 2.7 0.5 .. -1.0 1.7 1.3 4.9 .. .. .. ..United Kindgom .. 2.6 2.6 0.5 .. 1.7 0.6 1.3 3.9 .. .. .. ..

Other high income .. 4.3 6.1 1.8 .. 24.5 .. .. .. .. .. .. ..Hong Kong (China) .. .. 6.4 2.4 .. 34.0 .. .. .. .. .. .. ..Singapore .. 5.6 7.8 1.2 .. 14.2 .. .. .. .. .. .. ..Taiwan (China) .. 3.8 6.0 0.7 .. 32.7 .. .. .. .. .. .. ..

Real merchandise imports

High-income countries .. 10.1 2.9 -16.7 35.2 25.7 4.1 -0.3 1.5 -2.1 5.6 ..Industrial countries .. 10.1 2.9 -16.9 36.6 24.5 1.4 -0.8 1.8 -2.2 5.8 ..

United States 8.2 1.1 -3.7 -16.5 23.0 10.3 19.8 37.3 6.0 -4.7 3.1 ..Japan 5.2 -0.2 13.8 -3.9 42.3 8.0 4.5 35.1 6.2 0.8 2.9 ..Euro Area .. 14.0 6.6 -15.4 41.9 24.4 -11.6 -14.9 0.3 -0.9 8.4 ..United Kindgom 6.3 10.7 -9.5 -26.9 22.1 37.1 -1.6 -21.8 -1.0 -0.5 .. ..

Other high income 5.5 18.6 5.5 -21.3 43.9 47.9 7.7 -14.5 -1.2 -1.8 3.6 ..Hong Kong (China) 6.6 10.3 2.8 -9.8 20.1 35.3 32.6 4.5 2.0 -3.5 3.9 ..Singapore 5.2 6.3 9.7 -12.7 23.8 7.5 39.2 19.0 5.9 -0.4 0.4 -4.8Taiwan (China) 6.2 -1.2 0.1 -19.5 43.6 65.8 69.3 -6.2 -7.6 1.3 -1.8 -2.3

Import Prices

High-income countries .. 2.7 8.9 -9.5 -2.4 12.2 15.2 1.7 -1.3 0.3 -1.8 ..Industrial countries .. 2.3 8.6 -9.8 -2.2 12.4 16.5 2.2 -1.4 0.3 -1.9 ..

United States -0.1 4.3 11.4 -11.4 6.3 32.1 12.1 -13.9 -3.6 0.8 0.4 ..Japan -1.4 7.6 8.4 -25.2 -6.1 34.5 36.1 -9.0 -5.5 -3.6 0.0 ..Euro Area .. 1.6 5.0 -10.5 -7.0 5.1 19.2 8.6 -0.3 0.2 -3.2 ..United Kindgom -1.1 0.9 12.7 3.5 2.3 8.9 6.2 11.0 0.1 0.2 .. ..

Other high income -1.0 0.5 10.9 -5.2 -2.4 -0.3 10.2 12.6 -0.1 0.4 -1.0 ..Hong Kong (China) -1.2 -0.3 3.0 -1.3 3.0 2.4 6.1 10.2 0.5 1.4 -0.6 ..Singapore -0.3 3.5 10.5 -11.8 14.6 48.8 3.6 -17.7 -1.6 -0.8 2.0 1.1Taiwan (China) -1.6 9.0 8.8 -9.5 11.7 27.3 3.9 0.4 -1.5 -1.2 1.2 0.9

Real effective exchange rates a

Euro Area 33.5 1.3 4.1 4.2 -5.0 -5.1 3.5 -0.8 -6.5 -2.0 2.1 0.1 -0.2United States 14.4 -1.1 -4.6 -3.7 10.8 3.9 -6.9 -8.1 -3.0 0.4 -2.1 -0.7 ..Japan 7.4 -1.2 -6.6 9.8 13.7 17.7 -1.5 -5.9 0.9 1.9 1.9 1.6 ..United Kindgom 5.4 -2.4 2.1 -12.0 -8.2 -10.4 -4.8 5.2 2.8 2.9 0.2 1.5 ..Canada 3.5 -0.6 0.8 -8.3 -7.6 -2.6 6.8 12.6 11.8 1.1 -2.2 -1.0 ..Hong Kong (China) 3.5 -2.7 -4.7 -5.5 6.7 8.6 0.0 -5.0 -4.8 0.7 -1.8 -0.4 -1.3Korea, Rep. 2.5 -1.7 -2.0 -15.9 -13.3 -14.5 11.6 19.4 9.8 -3.5 -1.2 0.9 1.3Singapore 2.3 1.3 6.9 4.6 -9.2 -0.3 -0.9 -0.1 3.7 0.1 0.2 0.6 ..Taiwan (China) 2.1 -2.3 -1.3 -4.2 -9.3 -10.1 -2.4 4.3 6.6 -1.1 -2.2 -0.2 1.3Switzerland 1.7 0.0 -4.9 2.2 9.1 4.2 3.3 2.0 4.0 1.6 3.1 0.2 ..

a/ JP Morgan Trade Weighted Indices (Real, Broad basis). Data are averages of monthly data for the period in question.

Table A.2 Demand conditions in high-income countries(US dollar values unless otherwise indicated; percent change; seasonally adjusted annual rates except monthly figures, which are m/m change)



Average 2009 2010 Latest1999-08 2007 2008 2009 Q4 Q1 Q2 Q3 Jul Aug Sep 20-Oct

Policy RatesUnited States 3.44 5.02 1.93 0.16 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12Japan 0.33 0.70 0.70 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30Euro Area .. 3.84 3.89 1.28 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00United Kindgom 4.80 5.51 4.67 0.65 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

Ten year bondUnited States 4.70 4.63 3.66 3.22 3.42 3.71 3.50 2.76 2.96 2.72 2.61 2.44Japan 1.49 1.67 1.49 1.34 1.31 1.31 1.28 1.04 1.11 0.98 1.03 0.86Euro Area .. 4.20 4.00 3.26 3.22 3.20 2.85 2.44 2.63 2.41 2.29 2.24United Kindgom 4.77 5.01 4.52 3.65 3.78 4.06 3.77 3.21 3.37 3.19 3.08 3.00

Spreads (Basis points)b,c

Developing countries .. .. .. .. .. .. .. .. .. .. .. ..East Asia and Pacific .. .. .. .. .. .. .. .. .. .. .. ..

China 82 71 166 126 76 78 50 82 72 89 79 80Indonesia .. .. .. .. .. .. .. .. .. .. .. ..Thailand .. .. .. .. .. .. .. .. .. .. .. ..Malaysia 129 87 201 230 160 144 145 143 166 161 140 128

Europe and Central Asia .. .. .. .. .. .. .. .. .. .. .. ..Russian Federation 262 121 328 443 245 203 231 252 277 269 244 243Turkey 404 214 383 367 244 222 244 246 264 254 243 242Poland 99 61 159 222 142 147 161 171 200 196 161 157Czech Republic .. .. .. .. .. .. .. .. .. .. .. ..

Latin America and Caribbean 522 221 438 522 363 343 354 360 388 376 347 356Brazil 551 180 301 306 216 204 212 212 235 223 204 208Mexico 206 126 254 302 212 189 194 193 208 201 178 199Argentina 2920 320 858 1198 716 735 734 729 805 769 714 704Colombia 370 161 305 329 213 211 209 180 223 199 166 176

Middle East and North Africa .. 480 586 578 403 323 336 383 361 383 386 380

Saudi Arabia .. .. .. .. .. .. .. .. .. .. .. ..Iran .. .. .. .. .. .. .. .. .. .. .. ..Egypt .. 86 262 134 57 63 160 247 277 281 234 225Algeria .. .. .. .. .. .. .. .. .. .. .. ..

South Asia d .. .. .. .. .. .. .. .. .. .. .. ..India .. .. .. .. .. .. .. .. .. .. .. ..Pakistan .. 283 1040 1186 620 644 549 631 596 594 628 671Bangladesh .. .. .. .. .. .. .. .. .. .. .. ..Sri Lanka .. .. .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. .. .. .. .. .. .. .. .. .. .. ..South Africa 172 100 329 301 187 177 183 169 199 187 161 160Nigeria .. .. .. .. .. .. .. .. .. .. .. ..

Gross inflows e

Developing countries .. 149 211 353 144 100 89 92 53 26 88East Asia and Pacific .. 41 49 91 35 20 19 28 18 12 21Europe and Central Asia .. 35 64 72 30 27 26 26 16 4 14Latin America and Carribean .. 45 65 137 63 32 32 26 11 5 47Middle East and North Africa .. 15 11 4 2 2 2 3 3 3 1South Asia .. 3 7 31 10 13 6 7 4 2 3Sub-Saharan Africa .. 10 16 17 4 5 4 2 1 0 2

a/Monthly figures are simple averages of the daily figures, except the last month, which are the values reported on the mentioned date. Quarterly and Annual figures are simple averages of the monthly figures.b/Average values for Spreads are for the period 1996-2003.c/Aggregates as defined by JP Morgan.

Table A.3 Global credit conditions(percent unless otherwise indicated a/)



Weightsb Average 2009 2010 2010

1990 2000-09 2007 2008 2009 Q3 Q4 Q1 Q2 Jun Jul Aug Sep

Energy .. .. 244.8 342.0 214.3 230.3 256.1 266.1 267.8 258.0 257.4 260.1 262.2

Coal, Australia .. 10.7 250.4 484.2 273.7 271.7 295.8 362.6 379.0 374.0 365.6 342.0 361.4

Crude oil, average .. 13.1 251.9 343.6 218.8 241.6 267.5 273.0 276.9 264.7 264.2 268.6 269.6

Natural gas , Europe .. 15.1 221.7 347.5 225.7 179.0 202.3 229.2 194.6 200.6 208.4 219.0 214.6

Non-energy 100.00 .. 224.7 272.0 213.2 219.8 235.2 244.2 255.2 248.4 262.3 0.0 274.3

Agriculture 69.10 .. 180.3 229.5 197.8 199.5 212.6 216.6 215.3 214.3 219.4 0.0 228.2

Beverages 16.90 .. 169.9 210.0 219.9 226.4 247.9 242.5 246.8 253.7 261.7 0.0 260.4

Cocoa 3.90 9.8 215.5 284.5 318.9 327.2 377.4 364.0 354.4 356.7 355.7 341.2 317.3

Coffee, arabica 8.00 3.3 141.9 160.5 165.2 168.1 178.0 184.2 204.2 219.2 233.4 243.0 255.8

Coffee, robusta 2.80 1.0 209.1 254.2 180.1 175.3 171.3 165.2 176.3 185.7 205.9 199.6 196.3

Food 29.40 .. 184.7 247.4 205.1 206.4 213.7 213.1 201.0 199.2 209.4 0.0 221.7

Fats and oils 10.10 .. 209.0 277.3 216.2 220.9 224.5 224.7 219.7 217.2 225.0 0.0 245.3

Palm oil 2.30 4.6 251.5 305.7 220.1 218.7 236.0 260.3 262.0 257.2 260.1 291.7 292.0

Soybean meal 4.10 10.4 163.0 224.4 215.5 227.7 217.7 195.2 180.8 178.7 188.2 202.3 207.8

Soybeans 2.00 8.0 181.3 246.8 206.3 214.3 207.2 196.7 192.8 192.6 202.5 215.6 220.0

Grains 6.90 .. 189.0 281.7 214.9 202.3 210.8 205.1 186.6 178.0 192.3 0.0 210.8

Maize 1.70 6.3 184.9 252.0 186.9 170.9 189.6 183.8 178.2 172.5 185.0 198.3 232.6

Rice, Thailand, 5% 2.90 8.4 161.3 321.2 274.2 266.3 267.9 264.5 223.5 217.4 218.3 223.7 235.7

Wheat, US, HRW 1.90 7.2 223.7 285.8 196.4 183.0 180.0 171.3 155.5 138.2 171.6 215.8 238.1

Other food 12.40 .. 149.0 177.1 181.6 191.2 202.0 205.1 189.4 194.7 204.3 0.0 200.6

Bananas, US 2.30 8.5 159.4 199.1 199.8 194.9 191.7 184.2 203.3 226.9 232.4 212.1 207.7

Sugar, world 7.50 4.2 98.0 115.7 142.9 164.1 172.8 65.8 .. .. .. .. ..

Raw materials 22.80 .. 174.9 195.7 168.7 168.9 192.0 211.9 233.9 230.9 222.3 0.0 227.5

Cotton ("A" Index) 5.90 1.7 107.1 120.9 106.1 109.0 121.1 137.3 151.7 157.5 142.5 153.0 177.3

Rubber, Singapore 4.80 11.8 339.2 387.6 287.9 298.8 384.5 477.5 558.7 534.5 490.7 497.0 529.5

Sawnwood, Malaysia 2.90 3.0 135.6 149.5 135.5 129.7 135.8 132.5 140.0 141.4 146.5 150.0 147.3

Fertilizers 2.70 .. 240.1 566.7 293.0 252.1 242.8 259.0 253.3 248.9 259.4 0.0 276.4

Triple superphosphate 0.90 5.2 246.2 638.6 186.9 163.1 171.1 230.1 259.5 251.8 261.4 276.5 308.6

Metals and minerals 28.20 .. 314.0 325.7 235.6 257.6 280.8 299.0 337.3 318.2 350.4 0.0 368.7

Aluminum 7.90 2.0 170.3 166.1 107.5 117.0 129.3 139.6 135.3 124.7 128.3 136.7 139.6

Copper 9.30 12.6 392.5 383.6 284.0 323.1 366.6 398.8 387.5 358.4 371.4 401.7 425.1

Gold .. 13.3 249.7 312.4 348.7 344.1 394.8 397.4 428.5 441.9 427.5 435.7 455.5

Nickel 2.20 9.3 431.0 244.4 169.7 204.9 202.9 231.1 260.2 224.5 226.0 247.9 262.1

Memo:Crude Oil (US$) .. 13.1 71.1 97.0 61.8 68.2 75.5 77.1 78.2 74.7 74.6 75.8 76.1

Table A.4 Commodity price indices(current US dollar index,index unless otherwise indicated; a/)

a/ The World Bank primary commodity price indices are computed from 1987-89 export values in US dollars for low- and middle-income economies, rebased to 1990.b/ Energy and gold prices are not included in the index.



Average 2009 2010 2010

1999-08 2007 2008 2009 Q3 Q4 Q1 Q2 May Jun Jul Aug

Export values

Developing countries 11.1 19.2 21.1 -22.7 28.0 72.0 36.1 8.2 1.8 -0.6 -3.3 0.4East Asia and Pacific 18.5 22.0 16.8 -16.4 27.9 76.9 34.1 23.4 7.2 0.1 -2.6 -1.1

China 22.8 26.3 17.4 -16.3 26.0 72.1 34.7 35.1 10.5 -0.4 -1.8 -2.6Indonesia .. 13.2 20.2 -15.2 38.5 145.8 18.4 -12.9 -3.1 -1.3 0.4 5.7Thailand 12.6 18.7 15.8 -14.3 44.1 54.4 54.8 14.5 3.1 5.8 -13.4 3.1

Europe and Central Asia 18.9 20.7 30.9 -32.6 42.6 83.3 34.3 -7.0 -5.1 -2.4 -5.5 -0.2Russian Federation 20.3 16.4 33.9 -36.2 51.7 103.2 70.7 -19.5 -7.2 -3.1 -6.5 -0.8Turkey 17.2 .. .. .. .. .. .. .. .. .. .. ..Poland 19.7 26.6 22.0 -20.2 49.3 45.2 -2.1 -10.4 -5.3 -0.3 -2.9 5.6

Latin America and Caribbean 8.3 13.2 11.9 -20.3 10.0 66.0 34.6 17.9 0.3 -1.8 -3.2 6.2Brazil 14.5 16.9 22.6 -22.3 -20.2 46.1 63.9 41.9 5.3 -5.3 -4.3 7.0Mexico 9.5 8.7 7.4 -21.3 31.0 86.8 30.6 14.5 -1.1 -1.0 -2.2 6.2Argentina 10.2 20.2 25.7 -20.6 -30.9 39.6 34.0 78.3 -0.4 -1.4 -4.8 6.4

Middle East and North Africa 21.8 14.9 34.6 -33.2 20.5 58.0 53.0 -32.7 -6.7 0.2 .. ..Saudi Arabia 21.7 6.7 44.8 -43.2 45.7 129.5 28.1 -27.2 -5.7 4.0 .. ..Iran .. 17.9 32.5 -37.7 24.6 67.9 57.8 4.1 -4.4 -0.5 .. ..Egypt 23.3 18.5 56.3 -8.5 42.3 100.5 -27.8 -3.8 6.0 -3.2 -1.8 ..

South Asia 15.8 18.4 24.7 -14.1 21.8 35.0 55.3 9.7 -1.7 -0.8 -7.0 2.1India 18.4 22.0 26.9 -15.3 24.4 38.3 63.2 13.1 -1.2 -1.6 -7.6 2.2Pakistan 9.1 2.5 15.4 -12.8 31.7 61.3 36.2 -19.2 -5.1 2.6 1.7 1.9Bangladesh 11.6 8.3 23.8 -2.5 -17.4 -14.4 .. .. .. .. .. ..

Sub-Saharan Africa 16.8 20.0 27.9 -32.2 74.6 82.5 31.2 -27.2 -8.0 1.0 .. ..South Africa 11.8 21.0 15.4 -22.5 30.8 67.0 21.7 11.5 -4.3 11.8 0.3 -5.1Nigeria 21.0 16.0 29.9 -39.8 121.7 78.7 46.7 16.3 -11.0 -8.8 .. ..

Export prices b,c

Developing countries .. 5.2 18.0 -14.4 -3.7 18.8 8.3 -7.1 -1.5 -0.4 -0.3 -2.9East Asia and Pacific .. 5.1 10.4 -7.0 1.4 8.0 -0.4 -0.5 -0.6 -0.2 -0.1 -2.2

China 0.0 4.9 8.9 -5.7 0.2 3.3 -2.5 1.4 0.0 -0.3 -0.2 -2.1Indonesia .. 7.5 21.2 -20.7 7.7 40.5 18.6 -9.1 -2.4 -1.9 -0.5 -5.5Thailand 5.7 6.6 9.4 0.4 13.4 22.7 6.0 -0.8 -0.8 -0.8 2.4 -2.1

Europe and Central Asia .. 5.3 32.0 -24.0 -21.8 26.1 23.8 -8.7 -1.9 -1.0 -1.1 -4.9Russian Federation .. 3.8 43.6 -28.6 -33.6 30.4 37.4 -11.2 -2.3 -0.2 -1.4 -6.0Turkey 3.8 .. .. .. .. .. .. .. .. .. .. ..Poland -0.9 12.8 10.9 -11.6 25.5 -4.3 -38.7 -24.1 -5.8 0.6 30.2 -12.7

Latin America and Caribbean 1.0 6.8 14.5 -14.2 16.1 39.1 1.2 -7.2 0.0 -2.1 0.5 -2.9Brazil 5.4 7.2 23.6 -14.2 5.3 14.6 1.8 2.0 1.6 -1.1 0.4 -7.9Mexico 5.8 5.1 9.6 -14.4 12.7 43.8 11.1 -12.5 0.3 -3.4 0.1 0.3Argentina 5.3 11.4 23.7 -12.2 -1.7 9.8 10.4 -12.0 -0.5 -0.9 0.5 -1.7

Middle East and North Africa .. 4.6 32.1 -26.1 -19.7 41.5 41.2 -39.1 -7.7 1.1 .. ..

Saudi Arabia 23.8 5.6 54.4 -44.0 106.4 107.2 -6.7 -79.7 3.0 6.8 .. ..Iran .. 1.3 53.6 -33.7 -52.6 32.9 79.0 -31.9 -3.9 -0.4 .. ..Egypt .. 3.9 32.9 -21.9 -19.4 27.3 17.7 -12.5 -2.6 0.6 0.9 ..

South Asia 2.4 5.3 18.4 -9.3 -0.8 3.8 6.6 10.2 0.0 -0.4 -0.2 -4.4

India 4.3 5.3 19.0 -11.3 -1.9 4.5 4.9 13.9 0.1 -0.4 -0.5 -4.8Pakistan 0.5 4.1 30.6 6.0 -0.9 -12.9 24.6 -12.9 -0.9 -1.0 0.3 1.3Bangladesh -6.7 4.7 7.1 -4.4 2.1 5.8 .. .. .. .. .. ..

Sub-Saharan Africa .. 4.8 30.1 -22.5 -22.3 37.1 38.6 -17.2 -0.9 5.0 .. ..

South Africa 6.9 8.0 7.9 -1.1 35.1 44.7 5.0 3.2 -3.5 2.0 -3.1 -11.0Nigeria .. 1.2 55.5 -34.3 -60.6 41.6 91.4 -29.5 3.4 8.5 .. ..

Table A.5 Developing countries' merchandise export growth(US dollar values unless otherwise indicated; percent change; seasonally adjusted annual rates except monthly figures, which are m/m change /a)

/a Merchandise export (F.O.B), customs basis./b Implicit export unit values, U.S. Dollar basis./c In many cases countries are very late in reporting trade prices. To estimate more timely figures individual trade prices were updated using the median (mean) regional trade price for developing (developed) countries whenever 60% or more of reporters by trade weight reported.




Import valuesDeveloping countries 15.8 21.5 25.6 -20.6 26.5 66.7 41.1 5.5 -1.3 0.3 -3.3 3.5

East Asia and Pacific 18.7 18.7 21.3 -15.4 42.8 85.5 51.9 1.2 -0.6 0.0 -4.7 3.3China 23.2 20.8 18.7 -11.7 39.2 90.5 54.0 3.4 0.4 -1.1 -6.5 5.0Indonesia 16.8 22.0 73.1 -24.9 68.5 101.7 53.3 -7.0 -15.3 16.8 0.9 -4.6Thailand 15.5 8.6 28.2 -25.4 66.4 82.8 74.7 -13.1 -0.3 0.6 -0.5 0.3

Europe and Central Asia 17.2 30.2 27.0 -33.5 22.7 58.5 18.7 20.9 -1.2 -1.4 -1.5 6.1Russian Federation 17.5 36.4 32.1 -34.7 11.5 62.7 23.5 38.0 3.3 -4.1 0.2 14.8Turkey 16.0 21.9 19.3 -30.6 42.9 60.3 39.2 3.4 -7.2 -1.0 0.3 -0.6Poland 16.1 30.4 26.4 -28.7 44.3 37.5 20.2 -24.8 -2.7 -4.4 -3.4 14.9

Latin America and Caribbean 10.1 19.2 22.2 -24.7 22.7 44.2 53.4 29.1 -2.8 1.3 -2.2 4.3Brazil 11.6 31.9 43.4 -25.9 27.3 90.1 70.2 38.3 -7.7 1.8 -0.2 2.7Mexico 9.4 10.1 9.8 -24.2 33.6 51.7 47.1 28.1 -3.3 0.3 -3.0 4.5Argentina 6.2 30.6 28.8 -32.4 18.9 67.8 54.5 71.8 3.0 7.2 -8.7 11.7

Middle East and North Africa 14.7 22.9 44.9 -8.1 3.8 41.6 0.8 -11.7 -1.4 0.9 .. ..Saudi Arabia 14.4 29.1 26.4 -18.8 -2.2 22.7 -9.4 39.2 1.6 2.1 .. ..Iran 17.1 10.9 54.7 -14.7 20.0 52.8 -18.0 5.4 -0.6 5.3 .. ..Egypt 11.7 31.6 77.7 -6.6 40.5 23.3 49.0 -21.7 3.4 -2.6 7.5 ..

South Asia 19.0 21.4 38.6 -19.8 -5.9 94.0 77.1 -10.3 -1.5 1.6 -2.2 -0.4India 21.3 24.6 42.3 -19.9 -7.6 101.1 96.8 -11.0 -3.2 2.4 -3.2 0.1Pakistan 16.5 9.4 24.7 -22.3 -11.9 36.6 35.0 -8.1 10.7 -6.1 7.2 -3.9Bangladesh 12.3 15.4 28.9 -8.1 5.2 112.9 -43.8 15.2 2.7 1.4 .. ..

Sub-Saharan Africa 14.9 21.7 24.7 -18.7 28.8 33.4 4.3 -11.0 -2.1 1.5 .. ..South Africa 13.2 17.8 11.8 -27.3 33.6 92.2 17.8 3.0 -0.5 2.2 -2.8 6.9Nigeria 21.8 33.4 39.2 -20.1 1.6 14.7 12.8 -24.2 -14.3 2.3 .. ..

Import prices b,c

Developing countries .. 5.2 16.9 -11.1 -6.4 12.0 3.7 2.5 -0.8 0.2 -2.0 -2.6East Asia and Pacific .. 4.1 16.8 -11.3 -10.0 13.8 0.7 5.8 -0.4 0.3 -3.6 -2.8

China .. 5.1 17.7 -12.4 -10.8 15.4 -1.3 11.3 0.0 0.4 -5.0 -2.5Indonesia .. 4.3 28.4 -19.2 -19.5 9.2 20.0 -10.7 -3.3 2.6 0.6 -6.4Thailand 3.9 -4.0 8.7 0.3 -1.7 10.9 7.2 -8.8 -2.0 -0.8 -0.7 -1.4

Europe and Central Asia .. 5.1 11.1 -11.9 2.1 12.4 10.7 -0.4 -2.6 0.3 0.6 -4.0Russian Federation 1.7 4.0 11.0 -6.3 -0.4 6.8 3.2 -0.2 -0.5 -0.9 -0.1 -4.2Turkey 5.2 11.1 -0.8 -13.6 24.9 15.5 24.2 12.3 -5.9 2.9 1.0 -0.6Poland -0.2 -1.7 -0.5 8.6 -6.3 -29.6 -22.3 2.7 4.8 1.7 18.5 -6.7

Latin America and Caribbean 4.1 6.3 14.7 -8.5 0.7 12.1 3.8 2.1 -0.5 -0.2 -1.0 -1.1Brazil 5.6 8.3 21.9 -10.4 0.7 16.7 4.9 1.1 0.4 -2.7 -2.1 -0.4Mexico 3.3 5.4 8.4 -3.8 -0.2 8.7 5.8 3.1 0.0 0.4 0.2 -0.5Argentina 1.8 6.6 10.9 -11.8 8.8 4.3 2.7 25.9 -2.3 1.7 -5.9 -1.1

Middle East and North Africa .. 6.0 19.3 -10.3 -3.1 8.3 -4.2 -2.6 -1.7 -0.1 .. ..

Saudi Arabia .. 4.9 12.3 -6.5 3.3 5.1 -9.1 10.5 0.1 -0.5 .. ..Iran .. 5.4 20.8 -12.2 -8.2 8.7 -0.4 3.0 0.8 -1.1 .. ..Egypt .. 7.3 18.3 -12.9 -7.3 15.2 1.3 -4.6 -1.8 -1.5 0.5 ..

South Asia 2.3 6.5 30.3 -17.3 -13.4 9.9 20.4 0.5 0.5 0.6 0.4 -1.3

India 3.3 5.1 30.4 -18.3 -16.6 14.2 21.9 1.1 -0.2 1.6 -0.6 -1.0Pakistan 9.6 11.3 48.0 -9.2 23.0 -30.3 4.9 18.8 4.7 2.3 4.7 -4.3Bangladesh -6.2 5.9 17.9 -10.2 -4.7 8.5 2.3 -8.1 -0.6 -0.5 .. ..

Sub-Saharan Africa .. 6.4 20.0 -11.0 -4.7 8.7 3.1 -2.2 -0.7 0.0 .. ..

South Africa 5.8 10.8 25.5 -6.8 2.9 5.7 0.2 3.8 -1.5 0.1 -1.9 -1.1Nigeria .. 4.3 16.6 -9.9 -4.2 4.0 -1.2 -4.6 -1.2 0.5 .. ..

Table A.6 Developing countries' merchandise import growth(US dollar values unless otherwise indicated; percent change; seasonally adjusted annual rates except monthly figures, which are m/m change /a)

/a Merchandise import (C.I.F.), customs basis./b Implicit import unit values, U.S. Dollar basis./c In many cases countries are very late in reporting trade prices. To estimate more timely figures individual trade prices were updated using the median (mean) regional trade price for developing (developed) countries whenever 60% or more of reporters by trade weight reported.



US$ bn. % GDP 2009 2010 2010

2008 2008 2007 2008 2009 Q3 Q4 Q1 Q2 May Jun Jul Aug

World -168.7 -0.3 -85.8 -168.7 -35.5 -17.3 88.2 -14.0 -89.9 -113.0 -109.2 28.3 -272.3

High-income countries a -418.9 -1.0 -493.7 -503.2 -202.9 -156.5 -103.8 -182.7 -287.2 -366.9 -325.3 -184.7 -352.8Industrial countries -499.8 -1.2 -640.4 -748.7 -302.7 -254.6 -250.4 -369.1 -440.0 -505.7 -481.1 -344.7 -535.7

United States -706.1 -5.0 -870.5 -881.2 -548.3 -548.8 -594.3 -668.3 -719.2 -709.7 -764.9 -663.3 -757.2Japan 183.2 3.7 91.9 21.2 28.2 48.1 70.2 80.5 70.3 54.8 65.5 96.2 56.3Euro Area -19.6 -0.2 50.1 -6.7 56.1 73.2 92.1 45.6 38.0 0.8 30.4 36.1 38.7United Kindgom -73.6 -2.8 .. .. .. .. .. .. .. .. .. .. ..

Other high income 80.9 4.2 230.7 243.5 295.1 304.1 321.7 309.4 320.6 304.1 337.3 347.3 312.7Hong Kong (China) 30.5 12.8 -23.4 -26.2 -29.0 -38.6 -40.9 -44.1 -42.5 -37.5 -40.4 -50.4 -23.8Singapore 26.9 13.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Taiwan (China) 24.9 6.0 26.7 15.5 28.3 28.1 19.0 20.5 30.2 34.0 24.4 34.7 29.8

Developing countries 293.5 1.8 407.8 333.2 164.8 136.7 188.0 163.2 194.3 254.0 214.3 207.4 76.4East Asia and Pacific 469.7 9.6 333.6 323.8 254.6 198.3 207.9 163.1 272.8 327.2 330.0 363.2 276.2

China 426.1 11.5 261.9 295.2 194.8 155.2 147.4 114.3 217.2 264.1 272.2 331.1 225.9Indonesia 0.6 0.1 39.6 8.3 19.5 16.8 27.0 20.0 17.2 29.7 8.4 7.8 22.3Thailand -0.1 0.0 14.0 -1.1 18.9 16.1 11.4 7.3 20.2 18.9 29.2 2.5 7.5Malaysia 38.9 19.7 .. .. .. .. .. .. .. .. .. .. ..

Europe and Central Asia .. .. -23.3 -4.9 3.8 12.9 37.9 61.1 17.1 9.8 3.1 -23.5 -64.8Russian Federation 102.4 6.0 131.2 179.9 110.3 120.1 155.4 196.2 155.6 143.7 141.7 116.7 79.0Turkey -41.3 -5.7 .. .. .. .. .. .. .. .. .. .. ..Poland -29.0 -5.6 -25.4 -38.3 -12.8 -11.9 -10.8 -19.4 -11.6 -15.1 -8.4 -7.6 -22.0Czech Republic -6.6 -3.0 4.4 4.1 7.9 9.7 10.4 7.2 5.6 6.2 2.5 5.8 4.4

Latin America and Caribbean -21.6 -0.5 -2.9 -74.8 -22.2 -25.0 -3.7 -28.7 -48.4 -31.6 -56.0 -62.6 -51.2Brazil -28.2 -1.7 40.4 24.5 25.3 23.0 15.9 16.5 19.2 32.2 18.1 9.9 18.3Mexico -15.8 -1.6 -10.0 -17.5 -4.6 -6.7 6.1 -1.9 -10.3 -6.7 -10.6 -7.9 -3.6Argentina 7.6 2.6 11.2 12.7 16.9 14.3 13.6 12.9 15.4 16.4 11.5 13.2 11.3Colombia -6.7 -3.0 -2.9 -2.1 0.0 -0.7 1.7 2.8 0.1 1.4 -3.4 -5.5 -3.6

Middle East and North Africa .. .. 174.3 212.7 64.6 70.3 87.4 131.0 99.0 91.7 89.8 .. ..Saudi Arabia 132.9 27.3 118.6 188.4 79.3 78.4 113.0 128.8 103.5 97.0 102.8 .. ..Iran 0.0 0.0 50.0 56.3 19.0 19.0 23.2 37.3 37.5 37.4 33.5 .. ..Egypt -1.3 -0.8 -10.8 -22.7 -21.6 -21.8 -19.8 -27.0 -24.1 -24.3 -23.9 -28.0 ..Algeria 0.0 0.0 31.8 39.9 4.5 6.1 10.2 16.6 12.6 12.7 12.1 .. ..

South Asia .. -94.8 -157.3 -113.1 -103.1 -142.3 -172.3 -155.5 -152.0 -160.5 -168.6 -162.3India .. .. -68.9 -120.8 -88.2 -79.6 -111.9 -141.9 -126.1 -119.7 -130.6 -135.0 -131.2Pakistan -15.7 -9.8 -15.5 -20.9 -14.3 -14.2 -14.6 -15.6 -16.0 -18.5 -15.7 -17.9 -16.0Bangladesh .. .. -4.2 -6.0 -4.7 -3.9 -8.3 .. .. .. .. .. ..Sri Lanka .. .. -3.6 -5.8 -3.1 -2.8 -4.3 -6.4 -4.9 -5.1 -5.2 -6.0 ..

Sub-Saharan Africa -29.9 -3.0 21.2 34.6 -16.1 -9.1 10.5 26.6 12.2 7.0 5.8 .. ..South Africa -21.0 -7.5 -9.7 -8.3 -2.2 -0.1 -2.7 -2.2 -0.7 -4.0 2.9 5.4 -4.1Nigeria 20.3 9.3 27.8 32.5 8.9 13.6 21.0 26.3 32.1 33.8 26.3 .. ..

Memo:OECD .. .. .. .. .. .. .. .. .. .. .. .. ..Developing excl. China .. .. 145.6 37.3 -28.8 -16.8 43.3 54.3 -24.0 -13.6 -62.8 -147.2 -149.0Developing oil exporters 191.2 .. 276.1 314.6 139.3 136.6 258.5 321.2 231.8 234.5 176.5 154.7 127.2Developing non-oil exporters .. .. 131.5 18.6 25.3 0.0 -70.6 -158.8 -35.4 22.4 41.9 55.7 -45.5Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. .. ..

CAB

Table A.7 Merchandise trade balances(Billion US dollars; annual rates)

a/ Seasonally adjusted



WeightsAverage

Levelb 2009 2010 2010 Latest1995 2000-09 2007 2008 2009 Q3 Q4 Q1 Q2 Jun Jul Aug Sep 20-Oct

World 100.0 94.0 .. .. .. .. .. .. .. .. .. .. .. ..

High-income countries 78.3 .. .. .. .. .. .. .. .. .. .. .. .. ..

Industrial countries 70.6 .. .. .. .. .. .. .. .. .. .. .. .. ..

United States (SDR/USD) 15.7 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Japan 7.4 112.0 -1.2 13.9 10.4 15.0 6.9 3.2 5.8 1.2 3.8 2.5 1.2 2.7

Euro Area 29.5 .. 9.1 6.9 -5.0 -4.7 12.2 6.2 -6.7 -2.5 4.7 0.8 1.5 6.1

United Kindgom 5.6 0.6 8.7 -8.4 -14.9 -13.1 4.5 8.8 -3.6 0.8 3.7 2.3 -0.5 2.0

Other high income 7.7 101.4 .. .. .. .. .. .. .. .. .. .. .. ..

Hong Kong (China) 3.7 7.8 -0.4 0.2 0.4 0.6 0.0 -0.1 -0.4 0.0 0.2 0.1 0.1 0.1

Singapore 2.3 1.6 5.4 6.5 -2.7 -2.8 6.7 7.8 5.8 -0.3 1.6 1.6 1.6 2.2

Taiwan (China) 2.1 33.0 -1.0 4.2 -4.5 -4.8 2.1 6.4 4.0 -1.1 0.2 0.7 0.6 2.7

Developing countries 21.7 115.5 .. .. .. .. .. .. .. .. .. .. .. ..

East Asia and Pacific 7.5 100.4 .. .. .. .. .. .. .. .. .. .. .. ..

China 2.7 7.9 4.8 9.4 1.7 0.2 0.2 0.1 0.1 0.1 0.6 -0.2 0.7 1.1

Indonesia 1.1 9360.6 0.3 -5.4 -7.0 -7.6 15.4 25.2 15.5 0.3 1.1 0.8 -0.1 0.6

Thailand 1.3 38.9 10.7 2.7 -2.8 -0.3 4.6 7.4 7.3 -0.2 0.5 1.8 3.0 2.8

Malaysia 1.4 3.7 6.7 3.1 -5.4 -5.1 4.4 7.5 9.5 -0.3 1.9 1.6 1.5 0.3

Europe and Central Asia 4.3 94.5 .. .. .. .. .. .. .. .. .. .. .. ..

Russian Federation 1.5 28.6 6.3 2.8 -21.7 -22.4 -7.2 14.1 6.1 -2.3 2.1 0.7 -1.3 2.1

Turkey .. 1.3 10.0 0.1 -16.1 -19.2 3.3 9.9 1.9 -1.6 2.6 1.9 1.3 4.9

Poland 0.5 3.5 12.2 14.8 -22.8 -24.8 1.4 19.9 3.2 -3.5 5.4 3.1 2.4 6.3

Czech Republic 0.5 26.6 11.3 18.9 -10.5 -10.2 9.7 13.4 -2.8 -3.0 6.6 2.9 2.1 6.8

Latin America and Caribbean 5.5 142.6 .. .. .. .. .. .. .. .. .. .. .. ..

Brazil 1.1 2.3 11.7 6.2 -8.3 -10.7 31.0 28.5 15.9 0.4 2.1 0.5 2.4 2.7

Mexico 1.7 10.8 -0.2 -2.0 -17.4 -22.1 -0.1 12.5 6.0 0.2 -0.7 0.3 -0.2 2.6

Argentina 0.4 2.7 -1.3 -1.5 -15.2 -20.5 -12.7 -7.7 -4.4 -0.7 -0.2 -0.1 -0.4 -0.1

Colombia 0.3 2329.3 13.6 5.6 -8.8 -5.6 16.6 24.3 14.3 3.1 2.8 2.9 0.8 0.4

Middle East and North Africa 1.7 163.8 .. .. .. .. .. .. .. .. .. .. .. ..

Saudi Arabia 0.8 3.7 0.1 -0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Iran 0.4 .. -1.2 -2.1 -1.3 0.7 5.8 3.2 0.1 -1.4 0.4 -0.3 0.6 ..

Egypt 0.3 5.2 1.7 3.7 -2.0 -3.2 1.1 2.0 0.2 -1.0 -0.4 0.1 -0.2 0.0

Algeria 0.3 73.4 4.5 7.7 -10.8 -15.7 -7.2 -0.6 -1.8 -0.7 0.7 -0.3 -0.3 1.4

South Asia 1.2 107.4 .. .. .. .. .. .. .. .. .. .. .. ..

India 0.8 45.5 9.5 -5.0 -10.1 -9.5 4.6 8.5 6.9 -1.5 -0.5 0.5 1.3 3.6

Pakistan 0.2 62.4 -0.7 -14.1 -13.4 -10.2 -4.6 -5.8 -4.5 -1.1 -0.2 -0.1 -0.2 -0.2

Bangladesh 0.1 62.3 -0.1 0.4 -0.6 -0.8 -0.6 -0.5 -0.4 0.0 -0.1 -0.1 -0.1 -1.0

Sri Lanka 0.1 99.8 -6.0 2.1 -5.8 -6.2 -4.0 -0.2 2.3 0.1 0.5 0.5 0.0 0.6.. .. .. ..

Sub-Saharan Africa 1.5 117.9 .. .. .. .. .. .. .. ..

South Africa 0.6 7.7 -4.0 -14.6 -2.0 -0.4 32.6 32.4 12.1 0.2 1.4 3.3 2.5 3.5

Nigeria 0.3 124.9 2.2 5.6 -20.5 -22.9 -18.0 -1.9 -1.7 0.1 0.6 -0.2 -1.2 0.0

Memo:

OECD 73.7 .. .. .. .. .. .. .. .. .. .. .. .. ..

Developing excl. China 19.0 118.7 .. .. .. .. .. .. .. .. .. .. .. ..

Developing oil exporters 2.8 171.6 .. .. .. .. .. .. .. .. .. .. .. ..

Developing non-oil exporters 19.0 108.8 .. .. .. .. .. .. .. .. .. .. .. ..

Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. .. ..

Table A.8 Exchange Rates (USD/LCU)(annual percent change except monthly data which is change over previous month a/)




World 4.8 4.7 8.7 2.8 1.3 1.5 3.1 3.2 3.3 3.3 3.1 3.1

High-income countries 3.3 2.4 4.3 1.2 0.3 0.9 1.6 2.1 2.1 1.8 1.8 1.8Industrial countries 3.2 2.3 3.8 0.7 0.1 0.8 1.4 1.6 1.7 1.5 1.8 1.8

United States 3.8 2.9 3.8 -0.3 -1.7 1.5 2.4 1.8 2.0 1.0 1.2 1.2Japan 1.4 0.1 1.4 -1.4 -2.3 -2.0 -1.1 -0.9 -0.9 -0.7 -0.9 -0.9Euro Area 3.3 2.1 3.1 0.2 -0.4 0.3 1.0 1.4 1.5 1.3 1.6 1.6United Kindgom 3.6 2.3 3.6 2.2 1.4 2.1 3.3 3.4 3.3 3.3 3.1 3.1

Other high income 6.1 2.4 4.4 1.7 .. .. .. .. 2.3 1.9 2.0 2.0Hong Kong (China) 4.3 2.0 4.3 0.5 -0.8 1.3 1.9 2.6 2.5 2.8 1.4 1.4Singapore 6.5 2.1 6.6 0.6 -0.4 -0.8 0.9 3.1 3.2 2.7 3.1 3.1Taiwan (China) 3.5 1.8 3.5 -0.9 -1.3 -1.3 1.3 1.1 0.8 1.2 1.3 1.3

Developing countries 10.4 6.2 10.3 4.0 2.1 2.9 4.6 4.7 4.6 4.3 4.2 4.2East Asia and Pacific 9.5 5.6 9.5 1.5 -0.1 1.7 4.4 4.2 4.3 3.9 3.4 3.4

China 5.8 4.8 5.8 -0.7 -1.3 0.7 2.2 2.9 3.0 2.9 3.3 3.3Indonesia 9.5 5.8 9.5 4.8 2.6 2.6 3.8 4.4 4.2 5.0 6.1 6.1Thailand 5.5 2.3 5.5 -0.8 -2.2 2.0 3.7 3.2 3.5 3.3 3.5 3.5Malaysia 5.4 2.0 5.4 0.6 -2.4 -0.2 1.3 1.6 1.6 1.7 1.9 1.9

Europe and Central Asia 10.4 8.4 10.2 3.1 2.4 2.9 4.4 4.3 4.2 3.7 6.0 6.0Russian Federation 14.1 9.0 14.1 11.6 11.4 9.2 7.2 5.9 5.9 5.8 5.5 5.5Turkey 10.4 8.8 10.4 6.2 5.3 5.7 9.3 9.2 9.1 8.4 7.6 7.6Poland 4.3 2.4 4.3 3.8 4.0 3.7 3.3 2.3 2.2 2.3 2.0 2.0Czech Republic 6.3 2.9 6.3 1.0 0.2 0.4 0.6 1.1 1.1 1.1 1.9 1.9

Latin America and Caribbean 8.8 6.5 8.8 3.3 1.9 2.4 4.0 4.3 4.4 4.2 4.1 4.1Brazil 5.7 3.6 5.7 4.9 4.4 4.3 4.9 5.1 5.2 4.8 4.6 4.6Mexico 5.1 4.0 5.1 5.3 5.1 4.0 4.8 4.0 3.9 3.7 3.6 3.6Argentina 8.6 8.8 8.6 6.3 5.8 7.1 9.0 10.6 10.7 11.0 11.2 11.2Colombia 7.0 5.5 7.0 4.2 3.2 2.4 2.0 2.1 2.1 2.3 2.3 2.3

Middle East and North Africa 13.7 3.7 10.8 3.4 2.7 2.7 4.5 4.8 5.0 5.0 4.0 4.0Saudi Arabia 9.9 4.2 9.9 5.1 4.2 3.9 4.5 5.2 5.4 5.5 6.0 6.0Iran 25.5 17.2 25.6 13.5 12.0 7.4 9.1 9.3 9.5 8.3 9.4 9.4Egypt 18.3 .. .. .. .. .. .. .. .. .. .. ..Algeria 0.1 3.5 6.7 5.8 6.4 5.9 4.4 5.0 6.3 6.2 3.9 3.9

South Asia 10.9 7.6 10.9 10.8 10.5 10.0 11.2 10.8 10.9 10.7 11.3 11.3India 8.4 6.4 8.3 10.8 11.5 13.2 15.1 13.7 13.5 13.8 11.3 11.3Pakistan 20.3 7.6 20.3 13.7 10.6 10.0 13.3 13.0 13.1 12.7 12.3 12.3Bangladesh 8.9 9.1 8.9 5.4 4.1 7.5 8.9 8.7 8.7 8.7 .. ..Sri Lanka 22.6 15.9 22.6 3.4 0.8 3.0 6.6 5.3 5.3 4.7 4.2 4.2

Sub-Saharan Africa .. 6.9 10.5 7.3 4.1 4.1 3.9 4.7 4.6 4.3 4.5 4.5South Africa .. 7.1 11.5 7.1 6.4 6.0 5.6 4.5 4.6 4.2 3.7 3.7Nigeria 11.6 5.4 11.6 11.6 10.0 11.6 14.8 14.1 13.0 14.1 12.9 12.9

Memo: .. .. .. ..OECD 3.3 .. .. .. .. .. .. .. 4.6 4.3 4.4 4.4Developing excl. China .. 6.3 10.3 4.2 2.3 2.9 4.6 4.7 5.9 5.8 4.7 4.7Developing oil exporters 12.0 5.4 9.5 5.3 3.4 4.0 4.1 5.0 4.6 4.3 4.2 4.2Developing non-oil exporters 10.3 6.6 10.4 3.4 1.5 2.7 4.7 4.6 .. .. .. ..Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. ..

Table A.9 Global Inflation(annual percent change; seasonally adjusted a/)

a/ The CPI aggregates are the medians of the growth rates.



Weights 2009 2010 20101995 2007 2008 2009 Q4 Q1 Q2 Q3 Jun Jul Aug Sep

World 100.0High-income countriesb 82.8 4.13 2.32 0.44 0.39 .. .. .. .. .. ..

Industrial countries 80.6 4.15 2.32 0.44 0.39 .. .. .. ..United States (US Federal funds rate) 25.5 5.02 1.93 0.16 0.12 0.13 1.13 0.18 0.18 0.19 0.19Japan (Discount Rate) 18.4 0.70 0.70 0.30 0.30 .. .. .. .. .. ..Euro Area (Eurosys main refi rate-minimum bid) 24.5 3.84 3.89 1.28 1.00 1.00 1.00 1.00 1.00 1.00 1.00United Kindgom (Clearing bank's base rate) 3.9 5.51 4.67 0.65 0.50 0.50 0.50 0.50 0.50 0.50 0.50

Other high income 2.2 3.37 2.16 0.31 0.29 .. .. .. .. .. ..Hong Kong (Discount rate) 0.5 6.52 3.13 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50Singapore (MAS Interbank 1 month rate) 0.3 2.68 1.15 0.45 0.44 0.44 0.44 0.38 0.38 0.38 0.38Taiwan (Interbank swap overnight rate) 0.9 1.96 1.93 0.12 0.10 0.11 0.11 0.18 0.20 0.20 0.21

Developing countries 17.2East Asia and Pacific 4.4 .. .. .. .. .. .. .. .. .. ..

China (Lending rate, 6m to 1y) 2.4 6.71 7.18 5.31 5.31 5.31 6.31 5.31 5.31 5.31 5.31 5.31Indonesia (SBI 90 day rate) 0.7 9.18 9.18 9.18 9.18 .. .. .. .. .. .. ..Thailand (14day Repo Rate - BOT) 0.6 .. .. .. .. .. .. .. .. .. .. ..Malaysia (Interbank overnight rate) 0.3 3.50 3.48 2.11 1.99 2.05 3.05 2.70 2.47 2.65 2.72 2.72

Europe and Central Asia 3.0 .. .. .. .. .. .. .. .. ..Russian Federation (Discount (Refin.)) 1.2 10.27 10.87 11.38 9.45 8.64 8.00 .. 7.75 .. .. ..Turkey (Interbank 1 week average) 0.6 18.37 17.05 9.71 7.10 6.89 6.96 7.01 6.99 6.99 7.00 7.03Poland (Interbank 2 week) 0.4 4.48 5.88 3.62 3.30 3.28 3.34 3.35 3.36 3.34 3.35 3.36Czech Republic (Repo rate 2 weeks) 0.2 2.86 3.49 1.52 1.21 1.00 0.85 0.75 0.75 0.75 0.75 0.75

Latin America and Caribbean 5.8 .. .. .. .. .. .. .. .. ..Brazil (SELIC Target rate) 2.4 12.05 12.45 10.16 8.75 8.75 9.44 10.64 10.01 10.43 10.75 10.75Mexico (CETES 91 day closing) 1.0 7.36 7.88 5.52 4.62 4.63 4.64 4.63 4.65 4.64 4.64 4.61Argentina (30 Day deposit) 0.9 8.09 11.43 11.59 10.32 9.18 8.88 9.30 9.01 9.19 9.26 9.44Colombia (Fixed Term Deposit) 0.3 7.94 9.68 6.28 4.38 3.99 3.73 3.50 3.53 3.49 3.51 3.48

Middle East and North Africa 1.4 .. .. .. .. .. .. .. .. ..Saudi Arabia (IMF discount rate) 0.4 4.79 2.89 .. .. .. 0.32 .. .. .. .. ..Egypt (IMF discount rate) 0.2 9.00 10.17 .. .. .. 8.50 .. .. .. .. ..Algeria (IMF discount rate) 0.1 4.00 4.00 .. .. 4.00 4.00 4.00 4.00 4.00 .. ..

South Asia 1.6 .. .. .. .. .. .. .. .. ..India (Bank deposit 365+ days) 1.2 7.04 7.90 8.90 8.59 8.00 8.00 8.00 8.00 8.00 8.00 8.00Pakistan (Repo 7-15 day) 0.2 9.09 10.63 12.12 12.22 11.99 .. .. .. .. .. ..Bangladesh (Bank Rate) 0.1 5.00 5.00 .. .. 5.00 5.00 5.00 5.00 5.00 5.00 ..Sri Lanka (Central bank repurchase) 0.0 10.43 10.50 9.03 7.78 7.50 7.50 7.44 7.50 7.83 7.25 7.25

Sub-Saharan Africa 1.0 .. .. .. .. .. .. .. .. ..South Africa (Repo rate) 0.5 9.61 11.61 8.39 7.00 6.97 6.50 6.39 6.50 6.50 6.50 6.16Nigeria (IMF discount rate) 0.1 9.13 9.85 .. .. 6.00 6.00 .. .. .. .. ..

Memo:OECD 83.0 .. .. .. .. .. .. .. .. ..Developing excl. China 14.8 .. .. .. .. .. .. .. .. ..Developing oil exporters 2.0 .. .. .. .. .. .. .. .. ..Developing non-oil exporters 15.2 .. .. .. .. .. .. .. .. ..Asian high tech exporters .. .. .. .. .. .. .. .. .. ..

Table A.10 Global Central Bank Interest Rates(percentage a/)

a/ Monthly figures are simple averages of the daily figures; except for the latest month, the figure reported for the latest month is the value on the date the data has been reported (which is the last daily observation one day before the note becomes available).b/ High-income aggregates use 1995 USD GDP weights.



Average 2009 2010 20101999-08 2007 2008 2009 Q4 Q1 Q2 Q3 Jun Jul Aug Sep

World 91 .. .. .. .. .. .. .. .. .. .. ..High-income countries .. .. .. .. .. .. .. .. .. .. .. ..

Industrial countries .. .. .. .. .. .. .. .. .. .. .. ..United States 89 .. .. .. .. .. .. .. .. .. .. ..Japan 84 98 79 62 61 64 62 61 59 59 61 62Euro Area 99 457 403 222 265 271 259 256 252 260 271 276United Kindgom 88 155 100 65 70 69 67 71 64 67 70 73

Other high incomea .. .. .. .. .. .. .. .. .. .. .. ..Hong Kong (China) .. 163 139 121 137 139 137 143 144 147 154 162Singapore 80 18 10 4 4 4 4 4 5 5 5 5Taiwan (China) 72 101 87 74 75 76 75 76 73 76 79 81

Developing countriesa,b 156 246 220 176 188 191 190 195 185 190 197 205East Asia and Pacificc 123 .. .. .. .. .. .. .. .. .. .. ..

China 118 230 202 182 218 212 208 212 181 184 188 194Indonesia 207 414 407 356 339 360 385 419 346 365 370 397Thailand 188 260 245 201 181 187 202 226 182 189 202 223Malaysia 116 177 159 141 149 152 161 175 167 174 183 197

Europe and Central Asia .. .. .. .. .. .. .. .. .. .. .. ..Russian Federation 525 554 490 259 343 354 342 335 322 329 341 345Turkey 87 150 116 93 102 108 112 123 101 110 113 122Poland 168 274 229 132 147 146 138 142 134 143 152 162Czech Republic 354 768 847 577 580 557 511 512 544 575 599 589

Latin America and Caribbean 203 352 361 291 345 345 337 349 339 348 362 377Brazil 199 349 395 317 397 389 373 381 362 373 387 401Mexico 193 350 302 229 257 265 275 273 288 286 289 296Argentina 104 200 175 101 113 112 115 132 122 129 146 156Colombia 352 .. .. .. .. .. .. .. .. .. .. ..

Middle East and North Africa .. 261 231 164 181 187 185 188 173 179 186 194Saudi Arabia .. .. .. .. .. .. .. .. .. .. .. ..Iran .. .. .. .. .. .. .. .. .. .. .. ..Egypt 213 497 556 354 317 328 328 302 287 275 292 299Algeria .. .. .. .. .. .. .. .. .. .. .. ..

South Asia .. .. .. .. .. .. .. .. .. .. ..India 198 334 297 242 248 256 263 272 288 295 300 321Pakistan 241 .. .. .. .. .. .. .. .. .. .. ..Bangladesh .. 241 369 447 597 671 749 828 825 822 845 876Sri Lanka 229 .. .. .. .. .. .. .. .. .. .. ..

Sub-Saharan Africa .. .. .. .. .. .. .. .. .. .. .. ..South Africa 216 290 240 218 230 235 239 250 219 226 235 249Nigeria 409 .. .. .. .. .. .. .. .. .. .. ..

Memo: .. .. .. ..OECD .. .. .. .. .. .. .. .. .. .. .. ..Developing excl. China .. .. .. .. .. .. .. .. .. .. .. ..Developing oil exporters .. .. .. .. .. .. .. .. .. .. .. ..Developing non-oil exporters .. .. .. .. .. .. .. .. .. .. .. ..Asian high tech exporters .. .. .. .. .. .. .. .. .. .. .. ..

Table A.11 Stock Markets(indices, year 2000=100)

a/ Average for Developing countries and Other High Income countries is for the period 1995-2002Note: Quarterly and Monthly data is constructed from daily data by taking the last observation for the month. Annual data is the average over 12 months.b/ Aggregates defined by IFC/S&Pc/ East Asia Pacific including South AsiaSource: World - Morgan Stanley Capital International Index; USA - Wilshire 5000; Japan - Topix; Euro Area - S&P EUROPE 350; UK - Standard and Poor's 350; Hong Kong - Hang Seng

tops previous peak in 2007 increase in reserves in last 12 ... - world...

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