Global Monthly February 2017

Sources: Haver Analytics; World Bank.

Note: Data reflect headline, seasonally adjusted consumer price inflation. Last

observation is December 2016.

Global consumer price inflation

Table of Contents

Monthly Highlights .............................................. 2

Special Focus ....................................................... 6

Key Prospects Group Publications .......................... 8

Recent World Bank Working Papers...................... 8

Recent World Bank Reports .................................. 8

Table A: Major Data Releases ............................... 8

Table B: Activity and Inflation.............................. 9

Table C: Trade and Finance ................................. 9

Table D: Financial Markets ............................... 10

Table E: Commodity Prices ................................. 10

Overview

• Preliminary data indicate that global growth was broadly

stable in Q4, at slightly above 2½ percent (q/q saar).

• Global goods trade growth reached a post-crisis low of 1.1

percent for 2016 as a whole. However, trade growth

strengthened in the final two quarters of the year, and the

momentum appears to have continued in early 2017.

• The spike in U.S. long-term bond yields that followed U.S.

elections plateaued in recent weeks. Partly as a result,

EMDE financial markets have rebounded and capital flows

have resumed.

Chart of the Month

• Median global inflation has risen modestly but steadily in

recent months, to 1.8 percent y/y in December 2016, the

fourth consecutive monthly increase. Available data suggests

a continued increase in January.

• The uptick is the most sustained rally since late 2010. The

rise in commodity prices—particularly energy prices—is a

key factor behind the increase.

• In advanced economies, despite rising headline inflation

and inflation expectations during 2016, core inflation

remains restrained.

Special Focus: Investment Slowdown in EMDEs

• Investment growth in EMDEs has slowed sharply since 2010.

• The slowdown reflects weak activity, negative terms-of-trade shocks, declining foreign direct investment (FDI)

inflows, large private debt burdens, heightened political risk, and adverse spillovers from advanced economies.

• Although policy priorities depend on country circumstances, such as policy space, policymakers should be ready to

employ the full range of cyclical and structural policies to accelerate investment growth.

7e Global Monthly is a publication of the Global Macroeconomics Team of the Prospects Group in the Development Economics Vice Presidency. 7is edition was prepared by Dana Vorisek and Marc Stocker, based on contributions from John Ba:es, Mai Anh Bui, Sinem Celik, Gerard Kambou, Eung Ju Kim, Csilla Lakatos, Hideaki Matsuoka, Boaz Nandwa, Yoki Okawa, Ekaterine Vashakmadze, Peter Davis Williams, and Lei Sandy Ye. 7e report was Cnalized on February 27. For more information, visit: http://www.worldbank.org/en/research/brief/economic-monitoring

2

February 2017

Global economy: recovering. Global economy: recovering. Global economy: recovering. Global economy: recovering. Preliminary data indicate that

global growth was broadly stable in Q4, at slightly above 2½

percent (q/q saar). 7is still-modest growth momentum follows

markedly weak economic activity in the Crst half of last year.

Growth slowed in Q4 in the United States and, to a lesser degree,

in the Euro Area and Japan, while it strengthened in the East Asia

and PaciCc region. Global growth in Q4 was supported by

Crming global manufacturing, as industrial production and goods

trade growth reached multi-year highs (Figure 1A). 7e strong

global composite PMI reading in January, at a 22-month high,

points to further acceleration in global growth. 7e improvement

reEects particularly strong January PMI readings in the United

States and Russia, which o:set declines in Japan, the United

Kingdom, and Brazil.

Global trade: improved momentum.Global trade: improved momentum.Global trade: improved momentum.Global trade: improved momentum. Global goods trade

growth fell to a post-crisis low of 1.2 percent in 2016 as a whole.

Trade growth began to strengthen in the second half of the year,

however, expanding by 2.3 percent in Q3 (q/q saar) and an

estimated 4.6 percent in Q4. 7e improvement was broad-based,

supported in particular by strengthening import demand from

large emerging market and developing economies (EMDEs). 7e

positive momentum appears to have continued in 2017, as export

orders reached their highest levels in nearly six years in January

(Figure 1B). At 3.6 percent, global trade (goods and services) is

projected to grow faster than global output in 2017.

United States: sustained domestic demand. United States: sustained domestic demand. United States: sustained domestic demand. United States: sustained domestic demand. Growth slowed in

Q4, to 1.9 percent (q/q saar), from 3.5 percent in Q3, as exports

reversed gains in the previous quarter. However, robust domestic

demand growth was sustained, and labor market conditions

continued to improve (Figure 1C). Private investment registered

its strongest gain in more than two years. 7e manufacturing

PMI was at a two-year high in January and the services PMI

reached a 14-month high, although both dropped marginally in

February. PCE (personal consumption expenditure) inEation—

the preferred inEation benchmark for U.S. Fed policy—remained

below target at 1.6 percent in December.

Euro Area: apparent recovery in early 2017. Euro Area: apparent recovery in early 2017. Euro Area: apparent recovery in early 2017. Euro Area: apparent recovery in early 2017. Growth in the

Euro Area decelerated slightly in Q4 to 1.6 percent (q/q saar),

from 1.8 percent in Q3. January and February survey data

Monthly Highlights

FIGURE 1B Global manufacturing and export

orders

FIGURE 1C U.S. labor market

Sources: Haver Analytics, World Bank.

B. Last observation is January 2017.

C. Dotted lines are averages from January 2012 to present. Last observation is

January 2017.

FIGURE 1A Global growth, industrial production,

and trade

3

February 2017

suggests improvement in early 2017, however (Figure 2A). 7e

composite PMI increased further in February, to 56, reaching a

70-month high, while consumer conCdence dropped, but

remained above 2016 levels. Headline inEation picked up in

January to 1.8 percent (y/y), though core inEation was stable at

0.9 percent. Market-based 10-year-ahead inEation expectations

rose to 1.6 percent, close to but still below the ECB’s target rate

of 2 percent. A stalemate in GreeceGreeceGreeceGreece’s bailout negotiations in early

February was accompanied by a spike in Greek bond yields,

which have since receded somewhat.

Other advanced economies:Other advanced economies:Other advanced economies:Other advanced economies: generallygenerallygenerallygenerally resilient.resilient.resilient.resilient. GDP in JapanJapanJapanJapan

expanded 1 percent in Q4 (q/q saar), down from 1.4 percent in

Q3, due to a deceleration in consumption; however, export and

private capital expenditure growth remained solid. With core

inEation still at zero, the Bank of Japan left monetary policy

unchanged at its January meeting. Growth in the United United United United

Kingdom Kingdom Kingdom Kingdom was more resilient than market expectations in Q4,

at 2.9 percent (q/q saar), slightly up from 2.3 percent in Q3.

InEation rose to 1.8 percent (y/y) in January and is likely to rise

further, reEecting a weak pound sterling.

China: steady growth. China: steady growth. China: steady growth. China: steady growth. Growth was 6.8 percent (y/y) in Q4,

following a 6.7 percent (y/y) pace in Q3. 7e contribution to

GDP growth from Cxed investment, at 2.8 percentage points, was

the largest since 2015Q3, reEecting accelerated infrastructure

spending. Incoming data suggest steady growth in Q1. 7e

oMcial manufacturing PMI was 51.3 in January, similar to

December, while the non-manufacturing PMI edged up to 54.6

and exports and imports rebounded strongly. Credit growth

moderated in January, reEecting tighter regulations; however, at

11.9 percent (y/y), it still outpaced nominal GDP growth.

Foreign reserves fell to just under $3 trillion in January, yet the

monthly decline was the lowest since July 2016 as tightening of

capital controls helped stem capital outEows (Figure 2B).

Other major commodityOther major commodityOther major commodityOther major commodity----importing EMDEs: mixed. importing EMDEs: mixed. importing EMDEs: mixed. importing EMDEs: mixed. Growth

in IndiaIndiaIndiaIndia was higher than expected in Q4, at 7 percent (y/y),

largely driven by public spending and agriculture. Although long-

term inEation expectations are rising, inEation eased to 3.2

percent (y/y) in January, as demand slumped following phasing

out of large-denomination banknotes and food prices dropped. In

MexicoMexicoMexicoMexico, growth slowed to 2.9 percent in Q4 (q/q saar), from

4 percent in Q3. Fixed investment contracted (m/m) in October

and November. 7ough the manufacturing PMI improved in

FIGURE 2B China: foreign reserves

FIGURE 2A 2017 growth forecasts for advanced economies

FIGURE 2C Manufacturing PMIs in EMDEs

Sources: Consensus Economics, Haver Analytics, World Bank.

A. Last observation is February 20, 2017.

B. Last observation is January 2017.

C. PMI data are seasonally adjusted. Last observation is January 2017.

4

February 2017

January, consumer conCdence plunged. In PolandPolandPolandPoland, growth

rebounded strongly in Q4, to 7 percent (q/q saar), from 1.6

percent in Q3. Strong retail sales growth in December, which

continued in January, suggests that robust consumption

contributed to the rebound. In Turkey, Turkey, Turkey, Turkey, domestic policy

uncertainty and accelerating portfolio outEows in Q4 are holding

back economic activity. Growth contracted by 10.3 percent (q/q

saar) in Q3. 7e manufacturing PMI, at 48.7 in January, has

been below 50 since March 2016, while inEation is accelerating,

due in part to a weakening lira. Yet PMI readings have advanced

in EMDE importers and exporters since mid-2016 (Figure 2C).

Major commodityMajor commodityMajor commodityMajor commodity----exporting EMDEs: bottoming out. exporting EMDEs: bottoming out. exporting EMDEs: bottoming out. exporting EMDEs: bottoming out.

Growth in commodity-exporting countries as a group has

stabilized in recent quarters (Figure 3A). Following a 3.3 percent

contraction in Q3 (q/q saar) in BrazilBrazilBrazilBrazil and a dip in retail sales and

business and consumer conCdence in Q4, industrial production

rose in December and conCdence improved in January. In RussiaRussiaRussiaRussia,

rising oil prices helped boost industrial production in Q4. 7e

composite PMI for January, at 58.3, is the highest since June

2008. Consumption remains weak, however, and retail trade and

disposable income continued declining in Q4. In IndonesiaIndonesiaIndonesiaIndonesia, Q4

growth accelerated to 6 percent (q/q saar). Growth was supported

by a rebound of exports and stronger investment, while private

consumption remained robust. At -1.3 percent (y/y) in Q4,

activity in NigeriaNigeriaNigeriaNigeria contracted by severely than in Q3 (-2.2

percent y/y). In South AfricaSouth AfricaSouth AfricaSouth Africa, contracting manufacturing and

mining production (-4.3 percent and -10.4 percent, q/q saar)

suggest subdued growth in Q4, though an upturn in the

manufacturing PMI, from 46.7 in December to 50.9 in January,

signals that manufacturing may be stabilizing.

EMDE inEation: converging. EMDE inEation: converging. EMDE inEation: converging. EMDE inEation: converging. Headline inEation in

commodity-importing and commodity-exporting EMDEs is

converging (Figure 3B). Among the largest exporting economies,

inEation in BrazilBrazilBrazilBrazil, RussiaRussiaRussiaRussia, and ColombiaColombiaColombiaColombia has fallen rapidly

toward target levels since mid-2016, as currencies stabilize or

strengthen and food prices moderate on improved weather

conditions. In NigeriaNigeriaNigeriaNigeria, inEation has stabilized, albeit at very high

levels, after soaring following the abandonment of the exchange

rate peg in June 2016. Among major importers, inEation in

MexicoMexicoMexicoMexico has risen modestly since mid-2016 as the peso

weakened—compounded, in January, by the removal of fuel

FIGURE 3B Consumer price inflation in EMDEs

FIGURE 3A Growth in EMDEs

FIGURE 3C 10-year U.S. Treasury bond yields

Sources: Bloomberg, Haver Analytics, World Bank.

A. Last observation is 2016Q4.

B. Last observation is December 2016.

C. Last observation is February 22, 2017.

5

February 2017

subsidies. PolandPolandPolandPoland, 7ailand7ailand7ailand7ailand, and HungaryHungaryHungaryHungary have also seen a

sustained rise, from very low levels, on increasing energy costs,

strong domestic wage growth (Poland and Hungary), and

recovering demand (7ailand).

Global Cnancing conditions: higher interest rates.Global Cnancing conditions: higher interest rates.Global Cnancing conditions: higher interest rates.Global Cnancing conditions: higher interest rates. U.S. long-

term interest rates rose sharply following the U.S. elections in

early November 2016, reminiscent of their surge during the

Taper Tantrum in mid-2013, but have plateaued in recent weeks

(Figure 3C). Relative to the Taper Tantrum episode, however,

EMDE equity prices have recovered more quickly from initial

losses after the U.S. election, and bond spreads have narrowed to

pre-U.S. election levels. In some Euro Area countries, the

combination of rising inEation, increasing risk premia from

upcoming political events, and renewed banking sector concerns

have driven up long-term yields.

EMDE Cnancial markets: solid recent performance.EMDE Cnancial markets: solid recent performance.EMDE Cnancial markets: solid recent performance.EMDE Cnancial markets: solid recent performance. EMDE

Cnancial markets rebounded in early 2017 after a turbulent spell

in late 2016. EMDE equities recently surpassed 2016 highs,

reEecting some unwinding of U.S. dollar appreciation,

stabilization of U.S. bond yields, and a pickup in commodity

prices. Capital inEows to EMDE bond and equity mutual funds

have resumed after sharp outEows in late 2016 (Figure 4A).

Emerging-market sovereign bond spreads have tightened since

their most recent high in mid-November, to 337 basis points at

the end of February, a level last seen in late 2014. Buoyed by risk-

on sentiment, EMDE borrowers raised $78 billion in

international bond markets in 2017 through the end of February

(Figure 4B).

Commodity prices: continued recovery.Commodity prices: continued recovery.Commodity prices: continued recovery.Commodity prices: continued recovery. Prices of most

commodities continued to rise in January from their lows in early

2016 (Figure 4C). 7e recent uptick in oil prices has been

supported by the agreement between some OPEC and non-

OPEC producers to limit output during the Crst half of this year.

Oil prices are expected to average $55 per barrel (bbl) in 2017,

up from $43/bbl in 2016. Average metal and mineral prices are

projected to rise 11 percent (y/y) in 2017 as a result of supply

constraints, including closures of large lead and zinc mines and

stronger-than-expected demand from China. Among agricultural

commodities, increases in the prices of oils and meals and raw

materials are expected to o:set declines in grains following

favorable weather conditions in North America and Central Asia.

FIGURE 4B EMBI sovereign bond spreads

FIGURE 4A Capital inflows to EMDEs

FIGURE 4C Commodity prices

Sources: Bloomberg, World Bank.

A. Last observation is February 8, 2017.

B. The EMBI index is the average spread over U.S. Treasury bonds of the same

maturity for a diversified basket of emerging market issuers. Last observation is

February 8, 2017.

C. Last observation is January 2017.

6

February 2017

FIGURE 5B Contribution to EMDE investment

growth

FIGURE 5A Investment growth

FIGURE 5C EMDEs with investment growth below long-term average

Sources: Haver Analytics; International Monetary Fund; Oxford Economics;

World Development Indicators, World Bank.

A. Weighted averages. Long-term average starts in 1991 for EMDEs due to lack

of earlier data.

B. Percentage point contribution by each country group to EMDE investment

growth.

C. Long-term averages are country-specific and refer to 1990-2008. Latest year

is 2015. Vertical bars indicate global recessions.

Special Focus: Investment Slowdown in

EMDEs

Slowing investment growth. Slowing investment growth. Slowing investment growth. Slowing investment growth. Investment growth in EMDEs

has slowed sharply since 2010, declining from 10 percent, on

average, in 2010 to 3.4 percent in 2015 (Figure 5A). The

deceleration in investment has been most pronounced in the

largest emerging markets and commodity-exporting EMDEs, but

extends to the majority of these economies (Figure 5B).

Investment growth was not only well below its pre-crisis average

in 2015, but was also below its long-term average in more than

60 percent of EMDEs (Figure 5C).

Factors associated with the slowdown.Factors associated with the slowdown.Factors associated with the slowdown.Factors associated with the slowdown. In commodity-

importing EMDEs, slowing foreign direct investment (FDI)

inflows and spillovers from weak activity in major economies

accounted for much of the slowdown in investment growth since

2010. In commodity-exporting EMDEs, much of the slowdown

was due to a sharp terms-of-trade deterioration (in particular, for

energy exporters) and mounting private debt burdens (Figure

6A). Political and policy uncertainty, partly reflected in global

financial market volatility, has further contributed to lower

investment growth in several EMDEs .

Spillovers. Spillovers. Spillovers. Spillovers. Over the past five years, sub-par growth and growth

prospects in advanced-economy trading partners and source

countries for FDI into EMDEs has contributed to a slowdown in

EMDE output growth. For every 1 percentage point lower

output growth in the United States or the Euro Area, EMDE

output growth fell 0.8–1.3 percentage points within a year.

EMDE investment growth responded about twice as strongly as

EMDE output growth to declines in U.S. and Euro Area growth.

Sluggish economic activity in major advanced economies has

coincided with a policy-driven slowdown in investment growth in

China. This has contributed to weakening global commodity

prices and has weighed on growth in other EMDEs through inter

-sectoral input-output linkages and, indirectly, via output growth

spillovers.

7

February 2017

“Investment“Investment“Investment“Investment----less” credit booms.less” credit booms.less” credit booms.less” credit booms. Investment weakness has

been set against the backdrop of exceptionally benign domestic

(and global) financing conditions until late 2016. Policy interest

rates of advanced economy central banks are at or near record

lows and, in several instances, are negative. Private credit growth

in about 30 EMDEs was near or above levels associated with

credit booms at some point during 2010–15. Historically, around

40 percent of EMDE credit booms have coincided with

investment surges. However, credit booms since 2010 have

occurred with virtually no such investment surges but, rather,

rapidly rising consumption in many cases.

LongLongLongLong----term implications of weak investment growth. term implications of weak investment growth. term implications of weak investment growth. term implications of weak investment growth. Long-

term forecasts suggest that investment weakness is expected to

persist (Figure 6B). By slowing capital accumulation and

technological progress embedded in investment, weak post-crisis

investment growth has contributed to lower potential output

growth relative to pre-crisis rates.

Policy responses.Policy responses.Policy responses.Policy responses. Policymakers can boost investment both

directly, through public investment, and indirectly, by

encouraging private investment, including FDI, and by

undertaking measures to improve overall growth prospects and

the business climate. A direct approach, through expanding

investment in infrastructure and human capital, would help raise

demand in the short run, increase potential output in the long

run, and improve the environment for private investment and

trade. Public investment also helps close investment gaps and,

under the right conditions, can crowd in private investment

(Figure 6C). More e:ective use of counter-cyclical Cscal and

monetary policies can also promote private investment indirectly

by strengthening output growth, especially in commodity-

exporting EMDEs. 7ere may be little scope for increased public

investment or expansionary Cscal policy, however, if Cscal space is

limited. To raise investment growth sustainably, countercyclical

policies will need to be buttressed by structural reforms to

encourage both domestic private and FDI.

FIGURE 6B Five-year-ahead forecasts of

investment growth

FIGURE 6A Investment growth, 2010-15

FIGURE 6C Impact of 1-percent increase in public investment

Sources: Consensus Economics; Haver Analytics; International Monetary Fund;

Oxford Economics; World Bank.

A. “Low” and “High” indicate annual terms-of-trade growth in the bottom and top

one-third of the distribution, respectively. Difference in medians between “high”

and “low” subsamples is significant at the 5 percent level. Group medians for 105

EMDEs. B. Lines show unweighted average of five-year-ahead forecasts as of

December of 2010-15 and as of October 2016. Samples include 21 EMDEs, 25

advanced economies, and 46 world economies. C. Bars show cumulative

impulse responses given a 1 percent increase in public investment from the

baseline, based on a sample of 8 EMDEs for 1998Q1-2016Q2. The model

includes, in this order, real public investment, real GDP, real private investment,

current account balance and real effective exchange rate. Bars represent median

values, and error bars 16-84 percent confidence bands.

8

February 2017

Key Prospects Group Publications Global Economic Prospects - January 2017: Weak Investment in Uncertain Times

Commodity Markets Outlook - January 2017: Investment Weakness in Commodity Exporters

Commodity Markets Outlook - October 2016: OPEC in Historical Context

Recent World Bank Working Papers Services in the Trans-Pacific Partnership: What Would Be Lost?

The Global Role of the U.S. Economy: Linkages, Policies and Spillovers

The Changing Structure of Africa’s Economies

Impact of Oil Price Fluctuations on Financial Markets since 2014

How Is the Slowdown Affecting Households in Latin America?

Deep Integration and UK-EU Trade Relations

On the Structural Transformation of Rural Africa

Estimation and Inference for Actual and Counterfactual Growth Incidence Curves

Exchange Rate Flexibility and the Effect of Remittances on Economic Growth

Globalization and the Gender Earnings Gap

Emerging Economies’ versus Advanced Economies’ Investment Impact in Africa

Job Quality and Poverty in Latin America

Recent World Bank Reports World Development Report 2017: Governance and the Law

Doing Business 2017: Equal Opportunity for All

TABLE A: Major Data Releases

(Percent change y-o-y)

Recent releases: January 24, 2017 - February 22, 2017 Upcoming releases: February 23, 2017 - March 22, 2017

Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous

South Korea 1/24/17 GDP Q4 2.7 % 2.6 % Germany 2/23/17 GDP Q4 1.5 %

Philippines 1/25/17 GDP Q4 6.6 % 6.5% 7.1 % France 2/28/17 GDP Q4 1.1 %

UK 1/26/17 GDP Q4 2.2 % 2.1% 2.4 % Denmark 2/28/17 GDP Q4 1.2 %

United States 1/27/17 GDP Q4 1.9 % 1.7 % Sweden 2/28/17 GDP Q4 2.8 %

Spain 1/30/17 GDP Q4 3.0 % 3.0 % 3.2 % Poland 2/28/17 GDP Q4 2.2 %

Belgium 1/30/17 GDP Q4 1.1 % 1.1 % 1.3 % India 2/28/17 GDP Q3 7.3 %

France 1/31/17 GDP Q4 1.1 % 1.2% 1.0 % United States 2/28/17 GDP Q4 1.7 %

Mexico 1/31/17 GDP Q4 2.2 % 2.3% 2.0 % Belgium 2/28/17 GDP Q4 1.1 %

Indonesia 2/6/17 GDP Q4 4.9% 5.0% 5.0% Australia 2/28/17 GDP Q4 1.8 %

Japan 2/12/17 GDP Q4 1.0 % 1.3 % Finland 3/1/17 GDP Q4 1.6 %

Poland 2/13/17 GDP Q4 2.2 % Switzerland 3/2/17 GDP Q4 1.3 %

Italy 2/14/17 GDP Q4 1.0 % Spain 3/2/17 GDP Q4 3.2 %

Austria 2/14/17 GDP Q4 1.3 % Italy 3/3/17 GDP Q4 1.0 %

Germany 2/14/17 GDP Q4 1.5 % Greece 3/6/17 GDP Q4 1.8 %

Czech Republic 2/14/17 GDP Q4 1.9 % South Africa 3/7/17 GDP Q4 0.7 %

Eurozone 2/14/17 GDP Q4 1.7 % Hungary 3/7/17 GDP Q4 1.6 %

Greece 2/14/17 GDP Q4 1.8 % Bulgaria 3/7/17 GDP Q4 3.4 %

Malaysia 2/14/17 GDP Q4 4.3 % Brazil 3/7/17 GDP Q4 -2.9 %

Thailand 2/16/17 GDP Q4 3.2 % Japan 3/14/17 GDP Q4 1.3 %

Netherland 2/16/17 GDP Q4 2.4 % New Zealand 3/15/17 GDP Q4 3.5 %

Germany 2/23/17 GDP Q4 1.5 % Luxembourg 3/23/17 GDP Q4 4.6 %

(Percent change y-o-y)

9

February 2017

TABLE B: Economic Developments (Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized)

1Industrial production is total production (may exclude construction). When data are unavailable, "industral production, manufacturing" and "industrial production, manufacturing, non-durable manufacturing, petroleum and coal products, crude petrolem products" are used as proxies. 2Median inflation rate for each grouping.

TABLE C: Trade and Finance (Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period)

1Total reserves excluding gold are used as proxies when total reserves data are unavailable.

2016 2016

2015 2016 Q1 Q2 Q3 Q4 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Industrial Production, sa 1

World 2.0 2.0 1.7 2.0 2.9 4.8 1.8 1.4 1.3 1.5 1.6 1.9 1.6 2.3 1.9 1.9 3.2 3.5

Advanced Economies 0.5 0.2 0.2 0.0 2.1 3.1 0.2 -1.1 -1.0 0.0 -0.4 -0.2 -0.4 0.6 0.3 0.2 1.7 2.2

Emerging Market and Developing Economies 3.5 3.8 3.2 4.1 3.7 6.5 3.4 3.9 3.7 3.0 3.7 3.9 3.5 3.9 3.5 3.7 4.7 4.7

Commodity-exporting EMDE

-0.2 - 1.3 1.1 2.2 - 0.2 1.7 -0.5 -1.0 0.5 1.7 1.8 1.3 0.8

Other EMDE 5.1 4.9 4.0 5.3 4.1 7.3 4.7 4.7 5.4 4.7 5.0 4.8 4.1 5.0 4.5 4.7 5.7 5.2

East Asia and Pacific 5.8 5.9 4.7 7.0 5.6 6.0 5.5 5.5 6.3 5.5 6.0 6.2 6.0 6.4 5.5 5.5 5.9 5.9

East Asia excl. China 3.6 4.6 5.6 4.2 4.5 2.2 5.5 5.6 3.2 2.0 5.8 6.6 6.2 6.6 2.1 2.1 4.5 5.8

Europe and Central Asia 0.7 1.7 1.9 1.8 -4.1 10.7 1.2 2.6 1.2 2.4 2.3 2.0 -0.2 1.7 0.2 0.9 2.8 3.7

Latin America and Caribbean -3.2 -2.9 -2.9 -0.4 0.5 -1.3 -4.3 -5.0 -4.1 -4.9 -3.8 -2.3 -2.3 -3.0 -2.1 -2.7 -1.1 0.6

Middle East and North Africa 2.8 - 3.1 -3.4 8.4 - 6.7 7.2 2.7 2.0 2.4 2.9 3.7 3.1 4.3 6.5 - -

South Asia 4.1 1.2 3.8 3.3 0.7 0.3 0.0 3.3 2.3 -0.6 1.6 1.2 -0.4 0.9 0.6 -0.3 5.9 0.6

Sub-Saharan Africa 0.1 0.9 0.7 7.8 -6.1 -3.7 -0.9 1.7 -1.3 2.5 4.2 4.3 1.5 0.1 -0.1 -1.0 0.5 -0.8

Inflation, sa 2

World 1.4 1.3 1.4 1.7 1.4 1.7 1.5 1.4 1.3 1.8 1.8 1.7 1.7 1.4 1.5 1.5 1.6 1.8

Advanced Economies 0.1 0.4 0.3 0.2 0.4 0.8 0.5 0.3 0.1 0.2 0.1 0.3 0.4 0.4 0.5 0.6 0.7 1.1

Emerging Market and Developing Economies 2.2 2.4 2.6 3.0 2.9 2.6 2.5 2.8 2.5 3.2 2.8 2.6 2.9 2.9 3.0 2.5 2.4 2.7

Commodity-exporting EMDE

3.7 3.5 3.7 3.6 3.4 3.3 3.6 3.4 3.7 3.9 3.5 3.8 3.7 3.3 3.1

Other EMDE 1.0 1.1 1.1 2.0 1.7 1.8 1.1 1.3 1.0 1.9 1.8 1.8 1.8 1.5 1.6 1.6 1.6 1.8

East Asia and Pacific 1.0 1.6 1.1 1.9 2.4 2.4 1.2 1.3 1.4 1.9 1.8 1.9 2.0 1.9 2.4 2.3 2.4 2.4

Europe and Central Asia 1.6 0.4 0.5 0.1 0.3 1.0 1.3 0.3 0.2 0.1 0.1 0.1 0.6 0.3 0.3 0.9 0.9 1.5

Latin America and Caribbean 2.7 2.4 2.7 3.5 3.0 3.1 2.6 2.6 2.5 3.6 3.4 3.3 2.9 3.2 3.1 2.9 3.2 3.2

Middle East and North Africa 1.9 2.2 2.5 2.3 2.3 2.0 2.4 2.6 2.6 2.4 2.2 2.4 2.3 2.1 2.5 1.9 2.0 1.8

South Asia 3.5 4.3 3.5 5.0 5.2 3.9 3.3 3.6 3.9 4.4 5.0 5.7 5.5 5.0 4.4 4.2 3.7 3.9

Sub-Saharan Africa 3.7 5.3 5.2 5.2 5.7 5.9 4.9 5.3 5.3 5.3 4.8 5.6 5.5 5.9 5.9 5.7 5.3 6.6

2016 2016

2015 2016 Q1 Q2 Q3 Q4 Jan Feb Mar Apr May June Jul Aug Sep Oct Nov Dec

Exports, Nominal, US$, sa

World -11.5 -3.1 -12.6 14.8 -0.3 5.8 -12.3 -9.2 -3.8 -2.7 -3.1 -4.1 -6.6 2.8 -1.0 -3.7 4.2 3.8

Advanced Economies -11.3 -0.9 -5.1 16.1 -0.6 2.2 -9.4 -4.1 -3.6 0.0 -0.5 -2.2 -5.2 5.5 1.3 -2.2 5.3 5.5

Emerging Market and Developing Economies -11.9 -6.6 -23.8 12.5 0.2 13.0 -16.6 -16.7 -4.3 -7.2 -7.2 -7.0 -8.9 -1.6 -4.6 -6.0 2.6 1.2

Commodity-exporting EMDE -23.9 - -24.9 16.1 1.8 - -24.6 -13.2 -15.6 -13.4 -11.2 -13.0 -14.3 -1.6 -2.1

Other EMDE -3.8 -4.6 -21.7 11.2 -0.4 10.3 -12.2 -17.9 3.7 -3.2 -4.5 -3.1 -5.6 -0.9 -5.0 -4.9 2.0 -0.4

East Asia and Pacific -3.5 -6.1 -26.0 11.9 -0.2 11.3 -14.5 -21.3 5.0 -4.9 -6.1 -5.4 -6.9 -1.7 -6.8 -5.8 1.8 -2.1

Europe and Central Asia -20.7 -6.2 -19.6 19.5 -0.6 18.3 -22.1 -13.0 -13.1 -8.0 -10.4 -4.1 -8.8 1.0 -1.3 -3.6 6.2 6.8

-11.9 -2.5 -5.6 6.2 7.1 14.1 -11.6 -3.9 -9.2 -5.2 -1.9 -8.2 -7.6 2.3 2.1 -5.1 10.2 11.0

Middle East and North -26.3 - - - - - -23.2 - - - - - - - - - - -

South Asia -4.8 2.2 5.7 4.4 -18.3 44.8 -3.1 4.2 -0.2 1.2 -0.2 5.2 -4.1 5.8 -3.2 10.6 5.1 5.0

Sub-Saharan Africa -26.9 - -37.0 - - - -26.6 -23.1 -21.2 -15.0 - - - - - - - -

Imports, Nominal, US$, sa

World -12.6 -4.1 -12.5 10.1 -1.8 6.7 -12.1 -5.4 -7.4 -5.9 -2.4 -5.2 -9.7 1.7 -2.0 -4.2 2.7 2.1

Advanced Economies -12.5 -3.4 -8.4 8.4 -3.6 2.0 -10.4 -2.8 -6.5 -3.9 -1.9 -4.6 -8.2 1.5 -2.1 -5.0 2.0 1.4

Emerging Market and Developing Economies -12.8 -4.9 -19.1 13.5 1.7 16.7 -15.1 -9.8 -8.8 -9.2 -3.1 -5.9 -12.1 2.4 -1.7 -2.2 4.6 4.1

Commodity-exporting EMDE -14.9 - -17.3 0.0 -0.1 - -18.0 -15.2 -13.7 -13.7 -9.2 -8.5 -15.6 -1.4 -6.4

Other EMDE -11.5 -3.4 -21.2 18.6 2.3 16.9 -13.2 -6.9 -6.4 -7.5 -0.6 -5.3 -11.3 3.9 -0.2 -0.5 5.2 3.7

East Asia and Pacific -13.1 -3.7 -24.7 21.4 6.7 18.5 -16.6 -11.1 -5.5 -8.3 0.6 -6.7 -10.9 5.7 -0.2 -0.7 6.1 5.6

Europe and Central Asia -20.7 -1.2 3.8 13.2 -4.7 4.2 -14.7 -5.0 -3.6 -3.0 -0.9 1.4 -9.8 8.8 2.3 0.8 5.4 5.7

Latin America and Caribbean -9.9 -7.4 -16.3 4.8 3.1 5.8 -16.3 -9.9 -14.6 -9.8 -6.1 -8.7 -15.6 1.4 -3.2 -8.6 2.0 3.6

Middle East and North -6.3 - - - - - -13.0 - - - - - - - - - - -

South Asia -13.2 -5.6 -26.5 5.4 6.0 61.3 -6.6 -3.1 -18.1 -18.1 -8.6 -5.9 -14.7 -9.8 -0.8 7.7 10.9 3.5

Sub-Saharan Africa -7.3 - - - - - -18.7 - - - - - - - - - - -

International Reserves, US$ 1

World -5.9 -2.1 0.7 0.8 0.4 -3.4 -0.9 0.5 1.0 0.7 -0.7 0.8 0.3 -0.1 0.2 -1.1 -1.7 -0.7

Advanced Economies 0.6 2.9 3.7 1.7 1.4 -2.4 0.9 1.3 1.5 1.0 -0.6 1.4 0.5 0.1 0.9 -0.7 -1.5 -0.2

Emerging Market and Developing Economies -9.9 -4.8 -1.2 0.2 -0.2 -4.0 -2.0 0.1 0.8 0.5 -0.8 0.5 0.2 -0.2 -0.2 -1.4 -1.8 -1.0

Commodity-exporting EMDE -11.1 - -1.0 -0.7 -0.1 - -1.7 0.1 0.6 0.3 -0.9 0.0 0.4 -0.4 -0.1

Other EMDE -9.1 -5.8 -1.2 0.7 -0.3 -4.5 -2.1 0.0 0.8 0.7 -0.8 0.7 0.1 -0.1 -0.2 -1.2 -2.1 -1.3

East Asia and Pacific -11.3 -7.3 -1.8 0.3 -0.7 -4.9 -2.5 0.0 0.7 0.5 -1.0 0.9 0.0 -0.3 -0.4 -1.3 -2.4 -1.2

Europe and Central Asia -6.3 3.8 4.0 2.8 1.2 -4.3 0.6 1.9 1.4 1.6 -0.1 1.4 0.4 0.5 0.2 -0.8 -1.7 -1.9

Latin America and Caribbean -5.3 1.6 0.1 0.7 1.6 -0.8 -0.6 0.1 0.7 0.8 -0.2 0.1 1.6 0.0 -0.1 -0.6 -0.5 0.2

Middle East and North

-17.1 - -3.6 -2.6 -2.0 - -2.8 -0.7 -0.1 -0.5 -0.8 -1.3 -0.7 -0.8 -0.5 -2.6 - -

South Asia 11.7 3.8 1.0 2.0 3.5 -2.7 -1.1 -0.2 2.3 2.0 -0.8 0.8 1.4 0.6 1.3 -0.9 -0.8 -1.0

Sub-Saharan Africa -12.0 - -2.0 -1.9 - - -1.5 -1.4 0.9 0.4 -1.7 - - - - - - -

Latin America and Caribbean

10

February 2017

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TABLE D: Financial Markets (Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period )

2016 2016 2017 MRV 1

2015 2016 Q1 Q2 Q3 Q4 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Interest rates and LIBOR

U.S. Fed Funds Effective 0.13 0.40 0.37 0.37 0.39 0.45 0.37 0.37 0.37 0.36 0.38 0.39 0.40 0.40 0.41 0.41 0.55 0.66 0.66

ECB repo 0.05 0.00 0.00 0.00 0.00 0.00 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

US$ LIBOR 3-months 0.32 0.74 0.62 0.64 0.79 0.92 0.62 0.63 0.63 0.65 0.65 0.70 0.81 0.85 0.88 0.91 0.98 1.03 1.04

EURIBOR 3- -0.02 -0.26 -0.19 -0.26 -0.30 -0.31 -0.18 -0.23 -0.25 -0.26 -0.27 -0.29 -0.30 -0.30 -0.31 -0.31 -0.32 -0.33 -0.33

US 10-yr Treasury yield 2.12 1.84 1.92 1.75 1.56 2.12 1.77 1.88 1.79 1.80 1.64 1.48 1.56 1.63 1.74 2.12 2.50 2.44 2.41

German Bund, 10 0.54 0.14 0.32 0.12 -0.07 0.18 0.23 0.21 0.17 0.16 0.01 -0.09 -0.07 -0.05 0.03 0.22 0.30 0.34 0.32

Spreads (basis points)

JP Morgan Emerging Markets 415 410 478 419 372 369 507 443 421 418 418 387 367 361 357 380 370 354 340

Asia 224 221 264 227 197 197 282 243 224 223 233 210 190 191 192 201 198 185 174

Europe 348 302 339 305 282 283 359 319 308 305 303 290 282 273 274 294 282 272 261

Latin America & Caribbean 540 537 645 551 477 475 687 588 559 552 541 496 473 463 453 491 481 463 445

Middle East 456 517 555 538 508 467 580 545 539 530 545 540 492 493 487 475 438 416 402

Africa 415 518 626 548 461 436 661 573 546 552 546 494 448 440 441 444 422 401 391

Stock Indices (end of period)

Global (MSCI) 399 424 395 399 418 424 372 395 403 403 399 414 417 418 413 413 424 433 439

Advanced Economies ($ Index) 1663 1761 1638 1653 1726 1761 1547 1638 1671 1675 1653 1713 1720 1726 1697 1712 1761 1792 1815

United States (S&P 500) 2044 2258 2051 2099 2168 2258 1932 2051 2065 2097 2099 2170 2171 2168 2139 2199 2258 2279 2316

Europe (S&P Euro 350) 1474 1475 1352 1339 1388 1475 1347 1352 1379 1399 1339 1376 1390 1388 1377 1388 1475 1463 1491

Japan (Nikkei 225) 18817 19302 16555 15576 16450 19302 15989 16555 16407 17235 15576 16556 16887 16450 17050 18604 19302 19035 19379

Emerging Market and Developing Economies (MSCI)

794 861 821 834 903 861 740 821 840 807 834 879 894 903 908 863 861 909 930

EM Asia 404 419 404 407 448 419 369 404 405 400 407 431 442 448 444 426 419 443 454

EM Europe 244 295 272 265 273 295 241 272 288 268 265 264 269 273 274 273 295 302 306

EM Europe & Middle East 211 248 230 225 233 248 208 230 243 225 225 227 232 233 232 230 248 253 256

EM Latin America & Caribbean 1830 2341 2121 2269 2381 2341 1804 2121 2292 2038 2269 2359 2402 2381 2608 2330 2341 2516 2600

Exchange Rates (LCU / USD)

Advanced Economies

Euro Area 0.90 0.90 0.91 0.89 0.90 0.93 0.90 0.90 0.88 0.89 0.89 0.90 0.89 0.89 0.91 0.93 0.95 0.94 0.94

Japan 121.00 108.80 115.23 107.96 102.36 109.63 114.44 112.87 109.57 108.97 105.34 104.09 101.31 101.69 103.72 108.90 116.28 115.03 113.22

Brazil 3.33 3.49 3.91 3.51 3.25 3.28 3.97 3.70 3.56 3.54 3.42 3.28 3.21 3.25 3.18 3.33 3.35 3.20 3.12

China 6.29 6.65 6.54 6.53 6.67 6.84 6.55 6.51 6.48 6.53 6.59 6.68 6.65 6.67 6.74 6.85 6.92 6.89 6.88

Egypt 7.70 10.12 8.04 8.87 8.87 14.71 7.82 8.47 8.87 8.86 8.87 8.87 8.87 8.88 9.25 16.34 18.56 18.68 17.74

India 64.14 67.19 67.50 66.91 66.94 67.39 68.22 66.95 66.49 66.93 67.29 67.18 66.91 66.74 66.73 67.60 67.86 68.06 66.88

Russia 61.34 67.06 74.84 65.84 64.61 62.95 77.23 69.93 66.54 65.96 65.01 64.43 64.93 64.48 62.57 64.25 62.03 59.76 58.31

South Africa 12.77 14.71 15.83 15.01 14.07 13.92 15.79 15.39 14.62 15.36 15.05 14.40 13.79 14.01 13.92 13.96 13.88 13.60 13.34

Memo: U.S. nominal effective rate (index)

114.7 119.7 120.3 117.5 118.4 122.5 120.7 118.4 116.5 117.8 118.2 118.9 117.8 118.6 119.7 122.9 124.9 124.8 123.2

1 MRV = Most Recent Value.

Emerging and Developing Economies

TABLE E: Commodity Prices 2016 2016 2017 MRV 1

2015 2016 Q1 Q2 Q3 Q4 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Energy 2

65 55 43 56 57 64 41 47 51 57 59 57 58 58 64 59 68 69 66

Non-energy 2

82 80 76 81 82 83 76 78 80 81 83 82 82 81 81 83 84 85 87

Agriculture 2

89 89 85 91 91 90 84 86 88 91 94 92 91 90 90 90 89 91 93

Metals and minerals 2 68 64 59 62 65 71 59 62 63 61 61 65 65 64 65 73 75 76 77

Memo items:

Crude oil, average ($/bbl) 51 43 33 45 45 49 31 37 41 46 48 44 45 45 49 45 53 54 54

Gold ($/toz) 1161 1249 1181 1260 1334 1221 1200 1245 1242 1261 1276 1337 1340 1327 1267 1238 1157 1192 1245

Baltic Dry Index 711 676 363 613 736 994 307 390 608 623 608 707 675 826 870 1080 1031 913 702

Source: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg

1 MRV = Most Recent Value.

2 Indexes, 2010 = 100.