Global Monthly January 2017

Sources: Haver Analytics; World Bank.

Note: Includes 28 EMDEs with available quarterly data. Long-term averages start in

1991 for EMDEs and are based on annual data. Last observation is for Q2 2016.

Investment growth in EMDEs

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

• Global growth is estimated to have slowed in 2016 to a post

-crisis low of 2.3 percent, as global trade stalled, investment

decelerated, and policy uncertainty increased.

• According to the World Bank’s January 2017 Global

Economic Prospects, global growth is projected to recover to 2.7

percent in 2017, mainly reflecting receding obstacles to

activity in commodity-exporting economies.

• Downside risks still dominate the outlook and are

associated with heightened policy uncertainty, protectionist

pressures, and potential financial market disruptions.

Chart of the Month

• Investment growth in emerging market and developing

economies (EMDEs) has slowed sharply since 2010, and

was significantly below long-term averages in 2015-16.

• This deceleration has been most pronounced in the largest

emerging markets and commodity-exporting EMDEs, but

has spread to the majority of EMDEs.

• A protracted period of sluggish investment could further set

back potential growth by slowing capital accumulation and

productivity.

Special Focus: The U.S. Economy in the World

• Developments in the U.S. economy, the world’s largest, can have far-ranging global effects.

• A surge in U.S. growth—whether due to expansionary fiscal policies or other factors—could provide a significant

boost to the global economy.

• In contrast, lingering uncertainty about the course of U.S. economic policies or more restrictive trade policies could

have adverse effects for global activity.

4e Global Monthly is a publication of the Global Macroeconomics Team of the Prospects Group in the Development Economics Vice Presidency. 4is edition presents key messages of the January 2017 Global Economic Prospects, released on January 9. Prepared by Marc Stocker with research assistance from Peter Davis Williams. visit: http://www.worldbank.org/en/research/brief/economic-monitoring

2

January 2017

Global growth in 2016: a postGlobal growth in 2016: a postGlobal growth in 2016: a postGlobal growth in 2016: a post----crisis low. crisis low. crisis low. crisis low. According to the

World Bank’s January 2017 Global Economic Prospects (GEP),

global growth in 2016 edged down to 2.3 percent in 2016—the

weakest performance since the global :nancial crisis—amid

stalling global goods trade, weak investment, and heightened

policy uncertainty (Figure 1.A). 4e deceleration in global

activity re<ected weakening growth in major advanced economies

and continued stagnation among commodity-exporting emerging

market and developing economies (EMDEs). During the second

half of the year, commodity prices recovered, while global GDP

and trade growth regained momentum. However, a rapid rise in

U.S. bond yields and appreciation of U.S. dollar toward the end

of the year led to a notable tightening of :nancing conditions for

EMDEs—and, in some cases, substantial portfolio out<ows. 4e

increase in U.S. long-term interest rates since early November has

closely mirrored that observed during the Taper Tantrum in mid-

2013 (Figure 1.B). Unlike the Taper Tantrum, however, the

recent increase mostly re<ected rising in<ation expectations and

prospects of strengthening growth in the United States, which

could partially o?set the detrimental impact of higher borrowing

costs for EMDEs.

Global growth in 2017: moderate recovery projected. Global growth in 2017: moderate recovery projected. Global growth in 2017: moderate recovery projected. Global growth in 2017: moderate recovery projected. Global

growth is expected to increase to 2.7 percent in 2017, mainly

supported by stronger growth in EMDEs, as headwinds in

commodity exporters gradually diminish and domestic demand

in commodity importers remains robust. In advanced economies,

growth is projected to recover modestly to 1.8 percent in 2017

(from 1.6 percent in 2016), although the range of possible

outcomes has notably widened after the electoral outcome in the

United States and the United Kingdom’s decision to leave the

European Union. Baseline forecasts for the United States point to

a pickup in growth to 2.2 percent in 2017, from a disappointing

1.6 percent in 2016 (Figure 1.C). However, these projections do

not incorporate the potential e?ects of policy proposals by the

new U.S. administration, as their scope is still highly uncertain.

Fiscal stimulus, if implemented, could result in stronger U.S.

growth than currently predicted (See Special Focus). However,

some other policy changes, or persistent policy uncertainty, could

Monthly Highlights

FIGURE 1B U.S. 10-year bond yields around 2016

elections and mid- 2013 Taper Tantrum

FIGURE 1C Growth in advanced economies

Sources: Bloomberg, World Bank.

A., C. Shaded area indicates forecasts. Aggregate growth rates calculated using

constant 2010 U.S. dollars GDP weights.

B. Day 0 refers to May 22, 2013 for the Taper Tantrum and November 8, 2016

for the U.S. elections. Last observation is January 24, 2016.

FIGURE 1A Global growth

3

January 2017

dampen U.S. and international growth prospects. In the Euro

Area and Japan, supportive monetary policy will continue to

stimulate growth in 2017, which is expected to reach 1.5 percent

and 0.9 percent, respectively. Growth in the United Kingdom is

predicted to slow signi:cantly this year to 1.2 percent, from 2.0

percent in 2016, as uncertainty negatively a?ects investment and

higher in<ation curtails consumer spending. In January, Prime

Minister May emphasized that the United Kingdom would likely

exit the EU single market to regain control of immigration and

trade policies. To smooth the exit process, the government will

seek transitional arrangements beyond the two-year negotiating

period.

Global trends in 2017: rising trade, interest rates, and Global trends in 2017: rising trade, interest rates, and Global trends in 2017: rising trade, interest rates, and Global trends in 2017: rising trade, interest rates, and

commodity prices. commodity prices. commodity prices. commodity prices. Global trade growth is expected to recover

moderately, from 2.5 percent in 2016 to 3.6 percent in 2017,

supported by prospects of stronger import demand from large

emerging markets and some advanced economies. However, the

pace of trade growth remains constrained by weak global

investment and stalled trade liberalization. Growing uncertainty

about the direction of trade policies is of particular concern at

present. Capital <ows to EMDEs are projected to post a modest

recovery in 2017, provided that growth prospects in commodity

exporters improve and the normalization of U.S. monetary policy

is very gradual, as expected (Figure 2.A). Oil prices are forecast to

stabilize at an average of $55 per barrel (bbl) in 2017, up from

$43/bbl in 2016 - the lowest annual average level in 12 years.

Metals and mineral prices are expected to rise by about 10

percent on an annual average basis in 2017, while agriculture

prices are projected to remain broadly unchanged this year.

EMDEs in 2017: narrowing divergences between commodity EMDEs in 2017: narrowing divergences between commodity EMDEs in 2017: narrowing divergences between commodity EMDEs in 2017: narrowing divergences between commodity

exporters and importers. exporters and importers. exporters and importers. exporters and importers. EMDE growth is expected to

accelerate to 4.2 percent in 2017 and to an average of 4.7 percent

in 2018-19 (Figure 2.B). 4e divergence in growth performance

between commodity exporters and importers is on track to

narrow this year, although investment growth is expected to

remain subdued in both groups, following the trend of previous

years (Figure 2.C). In addition, the outlook for EMDE regions

with large numbers of commodity exporters remains mixed.

FIGURE 2B GDP growth in EMDEs

FIGURE 2A Policy rate expectations

FIGURE 2C Share of EMDEs with investment

growth below its long-term average

Sources: Bloomberg, Haver Analytics, International Monetary Fund, World Bank.

A. Market expectations are derived from overnight indexed swap rates. Historical

policy rates are for the effective fed funds (United States), EONIA (Euro Area),

and overnight call rate (Japan). Shaded area indicates forecast. Last observation

is January 24, 2016.

B. Shaded area indicates forecasts. Aggregate growth rates and contributions

calculated using constant 2010 U.S. dollars GDP weights.

C. Long-term averages are country-specific for 1990-2008.

4

January 2017

Growth in Latin America and the Caribbean, and in Europe and

Central Asia, is expected to accelerate in 2017, mainly re<ecting a

bottoming out in activity in Brazil and Russia. Growth in the

Middle East and North Africa will recover modestly, bene:ting

from higher oil prices. While growth should also pick up in Sub-

Saharan Africa, the improvement is notably weaker than

previously expected, as some commodity exporters struggle to

adjust to past deterioration in their terms of trade. Growth

forecasts for Nigeria and Angola, the two largest oil exporters in

that region, have been signi:cantly downgraded, re<ecting both

external and domestic headwinds. EMDE regions with

substantial numbers of commodity-importing economies—East

Asia and the Paci:c, and South Asia—are projected to continue

to experience solid growth. In China, growth is projected to

moderate to 6.5 percent in 2017, with investment growth

slowing and increasingly supported by policy-induced

infrastructure spending (Figure 3.A). Growth in India is expected

to recover to 7.6 percent in :scal year 2017/18, following a

temporary slowdown associated with the withdrawal of a large

volume of currency in circulation.

LowLowLowLow----income countries in 2017: adjusting. income countries in 2017: adjusting. income countries in 2017: adjusting. income countries in 2017: adjusting. Growth in low-

income countries (LICs) remained relatively subdued in 2016 at

4.7 percent. However, their external environment is expected to

improve gradually, with commodity prices stabilizing and global

trade regaining some momentum. Growth in LICs is expected to

recover to 5.6 percent in 2017. Growth will be substantially

weaker in oil exporters than in metals exporters, while remaining

strong in most commodity importers, partly supported by large

public investment (Figure 3.B). However, fragile countries will

see a less vigorous recovery over the forecast horizon, as political

uncertainty and security challenges continue to hinder private

investment.

Risks to the forecast: still tilted to the downside. Risks to the forecast: still tilted to the downside. Risks to the forecast: still tilted to the downside. Risks to the forecast: still tilted to the downside. 4ere is

substantial uncertainty around baseline projections for global

growth. 4e main downside risks to the global outlook include

prolonged periods of heightened policy uncertainty, which

already reached historical highs in 2016 (Figure 3.C), as well as

potential :nancial market disruptions amid tighter global

FIGURE 3B GDP growth in LICS

FIGURE 3A Investment growth in China

FIGURE 3C Global policy uncertainty

Sources: Economic Policy Uncertainty, Haver Analytics, World Bank.

A. State-owned and holding refers to either state-owned enterprises or

enterprises whose shares are owned by both public and private sectors.

2016YTD refers to November 2016 data.

B. Grey shaded areas denote forecast period.

C. Global policy uncertainty as measured in Davis (2016). Based on the

frequency of articles in domestic newspapers mentioning economic policy

uncertainty. 6-month moving average. Last observation is November 2016.

5

January 2017

:nancing conditions and renewed U.S. dollar appreciation. A

number of events could trigger the realization of downside risks.

4ese include electoral outcomes in some large economies that

further contribute to policy uncertainty, as well as monetary

policy actions by major central banks that result in sharp swings

in EMDE borrowing costs. A climate of mounting protectionist

tendencies could undermine the expected recovery in global

trade, while a prolonged period of elevated policy uncertainty in

the United States or other large economies could weigh on

investment growth, particularly in EMDEs (Figure 4.A). In turn,

weak investment could adversely a?ect productivity growth,

which has slowed considerably since the global :nancial crisis

(Figure 4.B). However, :scal stimulus in major economies—

including in the United States—could lead to stronger near-term

growth and thus represent an upside risk to the forecast.

Policy priorities: growthPolicy priorities: growthPolicy priorities: growthPolicy priorities: growth----enhancing mix. enhancing mix. enhancing mix. enhancing mix. In advanced

economies, low or negative real equilibrium interest rates

constrain the e?ectiveness of monetary policy and may warrant

more supportive :scal policies. In EMDEs, :nding an

appropriate balance between :scal adjustment, measures to

reduce vulnerabilities, and growth-oriented reforms aimed at

raising human capital and physical infrastructure should be a

priority. Policies that boost domestic sources of long-term

growth—critically, long-term investment and productivity—need

to be pursued. Investing in human and physical capital will help

narrow unmet investment gaps in skills and infrastructure. 4ese

policies could be reinforced by e?orts to further international

integration, such as those that support growth in EMDE services

trade and that create an environment to maximize the bene:ts of

foreign direct investment. Measures to support stronger growth

and reduce income inequality will have to be undertaken jointly

to overcome extreme poverty. If income per capita continued to

grow at the weak pace observed in 2015, extreme poverty would

remain signi:cantly above the World Bank’s 3 percent target by

2030. In a scenario where growth stabilizes around its long-term

average (1990-08), the poverty reduction goal would only be

attainable if there is a sustained reduction in income inequality

(Figure 4.C).

FIGURE 4B Labor productivity growth

FIGURE 4A Impact of a 10-percent rise in U.S.

EPU on EMDE investment

FIGURE 4C Global poverty rate with income per

capita growth equal to 1990-2008 average

Sources: Conference Board, World Bank.

A. Solid lines indicate the median impulse responses from a vector

autoregression model. Dotted lines indicate 16-84 percent confidence intervals.

B. Productivity measured as real GDP (in constant USD) per hour worked.

C. Assumes overall income per capita growth equal to the 1990-2008 average in

each country. In the “constant inequality” scenario, income per capita growth of

the bottom 40 percent is the same as that of the mean population. In “falling /

rising inequality” scenarios, income of the bottom 40 percent is 2 percentage

point higher / lower than that of the mean population.

6

January 2017

FIGURE 5B Export destinations of EMDE regions

FIGURE 5A Size of major economies

FIGURE 5C U.S. growth spillovers

Sources: Bank for International Settlements, Bloomberg, Federal Reserve Board

of Governors, International Monetary Fund, World Bank.

A. Liabilities are international investment positions. Trade is the sum of exports

and imports of goods. Average share for 2010-15, except for liabilities (2010-14).

B. Percent of total exports of each EMDE region. “Other AEs” stands for other

advanced economies.

C. Impulse responses from a vector autoregression for 22 advanced economies

(AEs) and 19 EMDEs for 1998Q1-2016Q2. Bars represent medians, and error

bars 16-84 percent confidence bands.

Special Focus: The U.S. Economy in the

World

4e importance of the U.S. economy. 4e importance of the U.S. economy. 4e importance of the U.S. economy. 4e importance of the U.S. economy. Developments in the

U.S. economy, because of its size and international linkages, are

bound to have substantial implications for the global economy. A

special focus section of the January 2017 Global Economic

Prospects explores potential spillovers from changes in U.S. growth,

monetary and :scal policies, and persistent uncertainty in

:nancial markets and economic policies. 4e United States is the

world’s single largest economy, accounting for 22 percent of

global GDP, 12 percent of global trade, and 35 percent of global

stock market capitalization (Figure 5.A). It is the largest export

destination for one-:fth of the world’s countries, and for more

than half of EMDEs in Latin America and the Caribbean and

South Asia. It is also the primary export market for several

countries in other EMDE regions, especially in East Asia and

Paci:c (Figure 5.B).

Baseline forecasts and risks. Baseline forecasts and risks. Baseline forecasts and risks. Baseline forecasts and risks. 4e outcome of the U.S.

elections has made macroeconomic projections more uncertain.

In the absence of concrete legislative proposals, current World

Bank forecasts do not incorporate policy changes suggested by the

new U.S. administration. As a result, U.S. growth is predicted to

increase modestly to 2.2 percent in 2017, and to reach 2.1

percent in 2018. While the overall impact of U.S. policy changes

cannot be assessed at the current juncture, the isolated e?ect of

some individual proposals can be analyzed.

U.S. tax policy changes. U.S. tax policy changes. U.S. tax policy changes. U.S. tax policy changes. Fiscal proposals put forward by the

new U.S. administration include cuts in the statutory corporate

income tax rate (from 35 to 15 percent), and personal income tax

rates (by around 2.5 percentage points on average). If fully

implemented, these measures could—without consideration of

any other policy changes —raise U.S. GDP growth forecasts to

2.2-2.5 percent in 2017 and 2.5-2.9 percent in 2018. 4e upper

bound of the range assumes that tax cuts are fully implemented in

the second quarter of 2017, and monetary policy does not react

to the change in :scal policy. 4e lower bound of the range

assumes both delayed implementation to the :rst quarter of 2018

and a tightening of monetary policy in reaction to changes in

:scal policy. In the case where monetary policy reacts to a more

rapid closing of the output gap, interest rates are estimated to

increase by an additional 60 basis points after four quarters, and

by up to 100 basis points after eight quarters. 4e revenue loss for

7

January 2017

the government would increase the budget de:cit by around 2.4

percentage points of GDP after eight quarters.

Other U.S. policy changes. Other U.S. policy changes. Other U.S. policy changes. Other U.S. policy changes. 4e new U.S. administration has

also signaled measures to stimulate infrastructure investment,

while suggesting sizable cuts in non-defense spending. Substantial

federal spending cuts could o?set the positive impact of corporate

and personal income tax cuts reported above. Other policy

proposals include changes to trade agreements, import tari?s, and

border tax adjustments. Should these proposals lead to higher

import costs in the United States or retaliatory measures by

trading partners, they could have detrimental e?ects for both the

United States and the global economy.

U.S. growth and policy spillovers. U.S. growth and policy spillovers. U.S. growth and policy spillovers. U.S. growth and policy spillovers. Stronger U.S. growth—

whether due to expansionary :scal policies or other reasons—

would support global activity. A 1-percentage-point increase in

U.S. growth could, after one year, boost growth by 0.8

percentage point in other advanced economies, and by 0.6

percentage point in EMDEs (Figure 5.C). In contrast, a more

rapid tightening of U.S. monetary policy could have signi:cant

cross-border e?ects, including for EMDE currencies and capital

<ows. Further U.S. dollar appreciation could exacerbate :nancial

stability concerns in some economies with elevated U.S.-dollar

denominated liabilities.

U.S. uncertainty spillovers. U.S. uncertainty spillovers. U.S. uncertainty spillovers. U.S. uncertainty spillovers. Even in the absence of U.S.

policy changes, heightened uncertainty driven by :nancial market

volatility or ambiguity about the direction and scope of policies

could discourage investors that base their decisions about long-

term investments on stable :nancing conditions and predictable

policies. A sustained 10-percent increase in U.S. policy

uncertainty could, after one year, reduce U.S. output growth by

about 0.15 percentage point, EMDE output growth by 0.2

percentage point (Figure 6.A), and EMDE investment growth by

0.6 percentage point (Figure 6.B).

Spillovers from the world to the United States. Spillovers from the world to the United States. Spillovers from the world to the United States. Spillovers from the world to the United States. 4e U.S.

economy is also a?ected by its linkages with the rest of the world.

Much global value chain activity is conducted through U.S.

multinational corporations and their aJliates abroad. U.S.

multinationals account for a sizable share of U.S. output and

labor productivity growth, and their presence in :nancial markets

is large. In turn, foreign multinationals operating in the United

States provide a considerable share of U.S. sales, trade, and

employment (Figure 6.C). As a result, growth setbacks

originating in other economies can reduce activity in the United

States.

FIGURE 6B U.S. policy uncertainty spillovers on

investment growth

FIGURE 6A U.S. policy uncertainty spillovers on

GDP growth

FIGURE 6C Role of foreign multinational corpora-tions in the United States

Sources: Bureau of Economic Analysis, World Bank.

A.B. Impulse responses from a vector autoregression for 22 advanced

economies (AEs) and 19 EMDEs for 1998Q1-2016Q2. Bars represent medians,

and error bars 16-84 percent confidence bands.

C. Share of multinational corporations in U.S. sales, exports and imports of

goods and employment. “Sales” indicates sales of multinational corporations in

gross output of U.S. private sector industries. Data covers 2010-2013.

8

January 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

Commodity Markets Outlook - July 2016: From Energy Prices to Food Prices: Moving in Tandem

Global Economic Prospects - June 2016: Divergences and Risks

Recent World Bank Working Papers Are Automation and Trade Polarizing Developing Country Labor Markets, Too?

A Difficult Relationship: Declining (but Productive) FDI Flows in Turkey

Services in the European Union: What Kind of Regulatory Policies Enhance Productivity?

Mining and Economic Development: Did China’s WTO Accession Affect African Local Economic Development?

Sovereign Wealth Funds and Long-term Investments in Sub-Saharan Africa

Pro-Growth Equity: A Policy Framework for the Twin Goals

Demographic Change and Development: A Global Typology

Grow, Invest, Insure: A Game Plan to End Extreme Poverty by 2030

Does Mobile Money Use Increase Firms’ Investment? Evidence from Enterprise Surveys in Kenya, Uganda, Tanzania

Does Input Trade Liberalization Affect Firms’ Foreign Technology Choice?

Recent World Bank Reports Doing Business 2017: Equal Opportunity for All

TABLE A: Major Data Releases (Percent, y-o-y) (Percent y-o-y)

Recent and upcoming releases: Dec 23, 2016– Jan 24, 2017 Upcoming releases: Jan 24, 2017 - Feb 23, 2017

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

Netherland 12/23/16 GDP Q3 2.4 % 2.4 % 1.8 % South Korea 1/24/17 GDP Q4 2.6 %

France 12/23/16 GDP Q3 1.0 % 1.1 % 1.1% Philippines 1/25/17 GDP Q4 7.1 %

UK 12/23/16 GDP Q3 2.4 % 2.3 % 2.1 % UK 1/26/17 GDP Q4 2.4 %

Japan 12/26/16 CPI NOV 0.5 % 0.4% 0.1 % United States 1/27/17 GDP Q4 1.7 %

South Korea 12/29/16 CPI DEC 1.3 % 1.2 % 1.3 % Spain 1/30/17 GDP Q4 3.2 %

Indonesia 1/2/17 CPI DEC 3.0% 3.1% 3.6% Belgium 1/30/17 GDP Q4 1.3 %

Thailand 1/4/17 CPI DEC 1.1 % 1 % 0.6 % France 1/31/17 GDP Q4 1.0 %

Netherland 1/6/17 CPI DEC 1.0 % 0.6 % Mexico 1/31/17 GDP Q4 2.0 %

China 1/9/17 CPI DEC 2.1 % 2.3 % 2.3 % Indonesia 2/6/17 GDP Q4 5.0%

Mexico 1/9/17 CPI DEC 3.4% 3.4% 3.3% Japan 2/12/17 GDP Q4 1.3 %

Czech Republic 1/10/17 CPI DEC 2.0 % 1.5 % Poland 2/13/17 GDP Q4 2.2 %

Greece 1/11/17 CPI DEC 0.0 % -0.9% Italy 2/14/17 GDP Q4 1.0 %

Brazil 1/11/17 CPI DEC 6.3% 6.3% 7.0% Austria 2/14/17 GDP Q4 1.3 %

France 1/12/17 CPI DEC 0.6 % 0.7 % 0.5 % Germany 2/14/17 GDP Q4 1.5 %

Sweden 1/12/17 CPI DEC 1.7 % 1.6% 1.4 % Czech Republic 2/14/17 GDP Q4 1.9 %

Romania 1/13/17 GDP Q3 4.5 % 5.8% Eurozone 2/14/17 GDP Q4 1.7 %

UK 1/17/17 CPI DEC 1.6 % 1.42 % 1.2 % Greece 2/14/17 GDP Q4 1.8 %

Germany 1/18/17 CPI DEC 1.7 % 1.7 % 0.8 % Malaysia 2/14/17 GDP Q4 4.3 %

South Africa 1/18/17 CPI DEC 6.8 % 6.5% 6.6 % Thailand 2/16/17 GDP Q4 3.2 %

China 1/19/201 GDP Q4 6.8 % 6.7 % 6.7 % Netherland 2/16/17 GDP Q4 2.4 %

Australia 1/24/17 CPI Q4 1.6% 1.3 % Germany 2/23/17 GDP Q4 1.5 %

9

January 2017

2015 2016

2014 2015 Q4 Q1 Q2 Q3 Jan Feb Mar Apr May June July Aug Sep Oct Nov

Industrial Production, sa 1

World 3.2 2.0 1.5 1.3 2.2 2.7 1.8 1.4 1.3 1.5 1.6 1.9 1.5 2.3 1.9 1.7 2.8

Advanced Economies 2.0 0.5 -1.5 0.2 -0.1 2.1 0.2 -1.1 -1.0 0.0 -0.4 -0.2 -0.4 0.6 0.3 0.1 1.6

Emerging Market and

Developing Economies

4.5 3.4 4.5 2.4 4.4 3.2 3.4 3.9 3.6 3.0 3.6 4.1 3.5 3.9 3.5 3.4 4.1

Commodity-exporting EMDE 0.0 -0.3 1.6 0.7 1.3 -0.1 0.3 1.8 -0.6 -1.0 0.4 1.7 2.1 0.5 0.0 -1.2 -

Other EMDE 6.8 5.1 5.6 3.0 5.7 3.6 4.7 4.6 5.4 4.7 5.0 5.0 3.9 5.0 4.5 4.6 5.5

East Asia and Pacific 7.5 5.8 7.8 3.4 7.2 5.5 5.5 5.5 6.3 5.5 6.0 6.2 6.0 6.4 5.5 5.4 5.6

East Asia excl. China 3.0 3.6 7.1 4.1 4.2 4.6 5.4 5.6 3.2 1.9 5.8 6.5 6.2 6.5 2.3 1.0 2.1

Europe and Central Asia 2.7 0.7 3.4 0.7 1.9 -3.8 1.5 2.9 1.0 2.4 2.0 1.9 -0.1 1.3 0.3 1.1 2.1

Latin America and Caribbean -0.7 -3.2 -6.4 -2.5 -0.4 -0.6 -4.1 -5.0 -4.0 -4.8 -3.7 -2.2 -2.2 -3.2 -2.2 -2.8 -1.5

Middle East and North Africa 0.8 2.6 9.2 2.5 -3.2 - 6.6 7.0 2.6 1.9 2.3 3.2 4.4 - - - -

South Asia 2.5 4.1 -6.8 4.1 5.5 -3.2 0.0 3.3 2.3 -0.5 1.6 2.9 -2.1 0.9 0.5 -1.3 4.9

Sub-Saharan Africa -0.1 0.1 -0.4 1.0 8.0 -6.4 -0.9 1.5 -1.2 2.4 4.1 4.2 1.4 -0.1 -0.1 -1.2 0.1

Inflation, sa 2

World 2.2 1.4 1.5 1.3 1.6 1.3 1.5 1.4 1.2 1.6 1.6 1.3 1.4 1.2 1.4 1.5 1.6

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

Emerging Market and

Developing Economies

3.3 2.4 2.2 2.5 2.7 2.8 2.5 2.7 2.4 2.8 2.6 2.6 2.8 2.6 2.8 2.6 2.6

Commodity-exporting EMDE 3.9 3.8 3.4 3.4 3.6 3.5 3.4 3.4 3.3 3.6 3.5 3.5 3.8 3.3 3.1 3.4 3.5

Other EMDE 2.6 1.0 1.1 1.1 2.0 0.9 1.0 1.3 1.0 1.9 1.6 1.2 1.2 0.9 1.0 1.4 1.6

East Asia and Pacific 3.2 1.0 1.0 1.1 1.6 2.1 1.1 1.3 1.4 1.6 2.1 1.8 1.9 1.7 2.3 2.4 2.4

Europe and Central Asia 1.6 1.7 1.4 0.7 0.3 0.5 1.5 0.4 0.3 0.3 0.1 0.1 1.2 0.5 0.5 0.9 0.9

Latin America and Caribbean 3.4 2.7 2.3 2.7 3.5 3.0 2.6 2.6 2.5 3.6 3.4 3.3 2.9 2.9 3.0 2.9 3.2

Middle East and North Africa 2.7 1.9 1.8 2.5 2.3 2.3 2.4 2.6 2.6 2.4 2.2 2.4 2.3 2.1 2.5 1.9 2.0

South Asia 6.8 3.5 3.0 3.5 4.8 4.8 3.3 3.6 4.0 4.4 5.0 5.6 5.4 4.5 4.4 4.2 3.8

Sub-Saharan Africa 4.4 3.9 4.2 4.5 4.9 6.0 4.4 4.5 4.7 4.6 3.7 4.5 6.0 6.1 6.3 6.5 6.7

2016

Dec

-

-

-

-

-

-

-

-

-

-

-

-

1.8

1.2

3.0

3.6

1.8

2.4

1.6

3.2

1.8

3.7

6.8

TABLE B: Activity and Inflation (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, "industrial production, manufacturing" and "industrial production, manufacturing, non-durable manufacturing, petroleum and coal products, crude petroleum products" are used as proxies. 2Median inflation rate for each grouping.

2015 2016

2014 2015 Q4 Q1 Q2 Q3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Exports, Nominal, US$, sa

World 1.1 -11.6 -6.2 -12.5 15.0 -0.7 -12.3 -9.2 -3.7 -2.6 -3.0 -4.0 -6.5 2.8 -0.9 -3.8 4.1

Advanced Economies 1.3 -11.3 -6.5 -5.4 16.4 -0.9 -9.4 -4.1 -3.5 0.0 -0.5 -2.2 -5.1 5.6 1.3 -2.3 5.2

Emerging Market and Developing Economies 0.8 -12.0 -5.7 -23.2 12.3 -0.3 -16.6 -16.7 -4.2 -7.0 -7.1 -6.8 -8.9 -1.7 -4.7 -6.2 2.3

Commodity-exporting EMDE -4.5 -24.1 -12.7 -24.5 17.5 -0.4 -24.6 -13.3 -15.2 -12.8 -10.5 -12.4 -14.2 -1.7 -2.4 -7.5 6.0

Other EMDE 4.9 -3.8 -1.8 -21.1 10.5 -0.3 -12.2 -17.9 3.7 -3.2 -4.5 -3.1 -5.6 -1.0 -5.0 -5.2 1.7

East Asia and Pacific 4.6 -3.5 -2.5 -25.2 11.6 0.1 -14.4 -21.4 5.1 -4.8 -6.0 -5.2 -6.7 -1.5 -6.7 -5.7 1.9

Europe and Central Asia -0.8 -20.7 -7.4 -19.9 19.7 -0.7 -22.1 -13.0 -13.1 -8.0 -10.4 -4.2 -8.8 1.0 -1.3 -3.6 6.2

Latin America and Caribbean -1.0 -11.9 -10.2 -5.4 4.5 6.8 -11.6 -3.9 -9.2 -5.3 -2.1 -8.2 -7.5 2.1 1.9 -5.3 9.8

Middle East and North Africa -5.1 -26.3 -7.3 - - - -23.2 - - - - - - - - - -

South Asia 4.0 -4.8 9.1 6.7 4.0 -18.4 -2.9 4.2 -0.2 1.3 -0.3 5.3 -3.9 5.8 -3.0 5.3 -0.1

Sub-Saharan Africa -6.1 -27.9 -19.9 -34.0 - - -27.6 -23.0 -19.8 -10.9 - - - - - - -

Imports, Nominal, US$, sa

World 1.2 -12.6 -7.6 -12.9 10.4 -2.5 -12.2 -5.4 -7.4 -5.8 -2.4 -5.2 -9.8 1.7 -2.2 -4.3 2.7

Advanced Economies 2.1 -12.5 -7.0 -8.9 8.8 -4.1 -10.4 -2.8 -6.5 -3.9 -1.9 -4.6 -8.3 1.5 -2.3 -5.1 1.8

Emerging Market and Developing Economies -0.4 -12.8 -8.5 -19.3 13.8 0.9 -15.2 -9.7 -8.7 -9.1 -3.0 -5.9 -12.2 2.3 -1.9 -2.4 4.7

Commodity-exporting EMDE -2.3 -14.9 -12.7 -17.2 -0.3 -1.1 -18.1 -15.3 -13.7 -13.7 -9.2 -8.7 -16.0 -1.6 -6.7 -7.4 -

Other EMDE 0.8 -11.5 -6.1 -21.7 19.1 1.7 -13.4 -6.9 -6.4 -7.5 -0.6 -5.3 -11.4 3.8 -0.4 -0.9 5.5

East Asia and Pacific -0.5 -13.1 -5.3 -25.5 22.8 5.6 -16.9 -11.1 -5.4 -8.1 0.8 -6.6 -11.0 5.6 -0.4 -0.9 5.9

Europe and Central Asia -3.7 -20.7 -9.5 4.1 12.6 -5.2 -14.8 -5.0 -3.6 -3.1 -1.0 1.2 -9.9 8.6 2.0 -0.2 7.1

Latin America and Caribbean -0.7 -9.9 -13.3 -16.4 3.9 2.9 -16.3 -9.9 -14.6 -9.9 -6.3 -8.9 -16.0 1.4 -3.4 -8.8 1.0

Middle East and North Africa 2.9 -6.3 -8.1 - - - -13.0 - - - - - - - - - -

South Asia 1.1 -13.2 -15.2 -26.2 5.3 6.1 -6.5 -3.1 -18.1 -18.1 -8.6 -5.8 -14.6 -9.7 -0.7 7.8 10.3

Sub-Saharan Africa 2.0 -7.4 -7.0 - - - -18.7 - - - - - - - - - -

International Reserves, US$1

World -1.3 -5.8 -2.7 0.7 1.0 0.6 -0.9 0.5 1.0 0.7 -0.7 0.9 0.3 0.0 0.3 -1.0 -1.4

Advanced Economies 0.1 0.6 -1.1 3.7 1.8 1.6 0.9 1.3 1.5 1.0 -0.6 1.4 0.5 0.1 1.0 -0.8 -0.8

Emerging Market and Developing Economies -2.1 -9.9 -3.6 -1.1 0.4 -0.2 -1.9 0.1 0.8 0.6 -0.8 0.6 0.2 -0.1 -0.2 -1.2 -1.7

Commodity-exporting EMDE -6.9 -11.0 -2.0 -0.9 0.0 - -1.6 0.2 0.6 0.3 -0.8 0.4 0.5 - - - -

Other EMDE 0.6 -9.1 -4.4 -1.2 0.7 -0.5 -2.1 0.0 0.8 0.7 -0.8 0.7 0.1 -0.2 -0.3 -1.1 -2.0

East Asia and Pacific 0.2 -11.3 -4.4 -1.8 0.3 -0.8 -2.5 0.0 0.7 0.5 -1.0 0.9 0.0 -0.4 -0.4 -1.3 -2.3

Europe and Central Asia -16.7 -6.3 -3.7 4.0 2.8 1.1 0.6 1.9 1.4 1.6 -0.1 1.4 0.4 0.5 0.2 -0.8 -1.7

Latin America and Caribbean 0.1 -5.3 -1.5 0.1 0.6 1.4 -0.6 0.1 0.7 0.8 -0.2 -0.1 1.6 -0.1 -0.1 -0.5 -0.5

Middle East and North Africa -2.7 -16.9 -3.7 -3.4 - - -2.7 -0.6 -0.2 -0.5 - - - - - - -

South Asia 11.3 11.7 1.3 1.0 2.0 3.5 -1.1 -0.2 2.3 2.0 -0.8 0.8 1.5 0.6 1.3 -0.9 -0.7

Sub-Saharan Africa -9.6 -11.9 -0.1 -2.0 - - -1.5 -1.4 1.0 0.5 -1.6 - - - - - -

2016

Dec

-

-

-

-

-

-1.5

-

-

-

-

-

-

-

-

-

3.9

5.0

-

-

-

3.2

-

-

-

-

-

-1.1

-1.2

-0.7

0.0

-

-1.1

-

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.

10

January 2017

© 2016 International Bank for Reconstruction and Development / 4e World Bank

1818 H Street NW, Washington, DC 20433

Telephone: 202-473-1000; Internet: www.worldbank.org

Some rights reserved

4is work is a product of the sta? of 4e World Bank with external contributions. 4e :ndings, interpretations, and conclusions expressed in this work do not necessarily re<ect the views of 4e World Bank, its

Board of Executive Directors, or the governments they represent. 4e maps were produced by the Map Design Unit of 4e World Bank. 4e World Bank does not guarantee the accuracy of the data included in this

work. 4e boundaries, colors, denominations, and other information shown on these maps do not imply, on the part of 4e World Bank Group, any judgment on the legal status of any territory, or any endorse-

ment or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of 4e World Bank, all of which are speci:cally reserved.

2016 MRV 1

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

Interest rates and LIBOR (percent)

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

ECB repo 0.05 0.00 0.00 0.00 0.00 0.00 0.05 0.05 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 0.62 0.63 0.63 0.65 0.65 0.70 0.81 0.85 0.88 0.98 1.04

EURIBOR 3-months -0.02 -0.26 -0.19 -0.26 -0.30 -0.31 -0.15 -0.18 -0.23 -0.25 -0.26 -0.27 -0.29 -0.30 -0.30 -0.31 -0.32 -0.33

US 10-yr Treasury yield 2.12 1.84 1.92 1.75 1.56 2.12 2.11 1.77 1.88 1.79 1.80 1.64 1.48 1.56 1.63 1.74 2.50 2.43

German Bund, 10 yr 0.54 0.14 0.32 0.12 -0.07 0.18 0.51 0.23 0.21 0.17 0.16 0.01 -0.09 -0.07 -0.05 0.03 0.30 0.42

Spreads (basis points)

JP Morgan Emerging Markets 415 410 478 419 372 369 485 507 443 421 418 418 387 367 361 357 370 357

Asia 224 221 264 227 197 197 268 282 243 224 223 233 210 190 191 192 198 183

Europe 348 302 339 305 282 283 338 359 319 308 305 303 290 282 273 274 282 275

Latin America & Caribbean 540 537 645 551 477 475 662 687 588 559 552 541 496 473 463 453 481 469

Middle East 456 517 555 538 508 467 542 580 545 539 530 545 540 492 493 487 438 417

Africa 415 518 626 548 461 436 644 661 573 546 552 546 494 448 440 441 422 399

Stock Indices (end of period)

Global (MSCI) 399 424 395 399 418 424 375 372 395 403 403 399 414 417 418 413 424 430

Advanced Economies ($ Index) 1663 1761 1638 1653 1726 1761 1562 1547 1638 1671 1675 1653 1713 1720 1726 1697 1761 1781

United States (S&P 500) 2044 2258 2051 2099 2168 2258 1940 1932 2051 2065 2097 2099 2170 2171 2168 2139 2258 2265

Europe (S&P Euro 350) 1474 1475 1352 1339 1388 1475 1381 1347 1352 1379 1399 1339 1376 1390 1388 1377 1475 1467

Japan (Nikkei 225) 18817 19302 16555 15576 16450 19302 17518 15989 16555 16407 17235 15576 16556 16887 16450 17050 19302 18842

Emerging Market and

Developing Economies (MSCI) 794 861 821 834 903 861 742 740 821 840 807 834 879 894 903 908 861 902

EM Asia 404 419 404 407 448 419 374 369 404 405 400 407 431 442 448 444 419 439

EM Europe 244 295 272 265 273 295 237 241 272 288 268 265 264 269 273 274 295 296

EM Europe & Middle East 211 248 230 225 233 248 202 208 230 243 225 225 227 232 233 232 248 250

EM Latin America & Caribbean 1830 2341 2121 2269 2381 2341 1744 1804 2121 2292 2038 2269 2359 2402 2381 2608 2341 2518

Exchange Rates (LCU / USD)

Advanced Economies

Euro Area 0.90 0.90 0.91 0.89 0.90 0.93 0.92 0.90 0.90 0.88 0.89 0.89 0.90 0.89 0.89 0.91 0.95 0.93

Japan 121.00 108.80 115.23 107.96 102.36 109.63 118.37 114.44 112.87 109.57 108.97 105.34 104.09 101.31 101.69 103.72 116.28 114.62

Emerging and Developing Economies

Brazil 3.33 3.49 3.91 3.51 3.25 3.28 4.06 3.97 3.70 3.56 3.54 3.42 3.28 3.21 3.25 3.18 3.35 3.17

China 6.29 6.65 6.54 6.53 6.67 6.84 6.57 6.55 6.51 6.48 6.53 6.59 6.68 6.65 6.67 6.74 6.92 6.88

Egypt 7.70 10.12 8.04 8.87 8.87 14.71 7.83 7.82 8.47 8.87 8.86 8.87 8.87 8.87 8.88 9.25 18.56 18.75

India 64.14 67.19 67.50 66.91 66.94 67.39 67.31 68.22 66.95 66.49 66.93 67.29 67.18 66.91 66.74 66.73 67.86 68.18

Russia 61.34 67.06 74.84 65.84 64.61 62.95 77.36 77.23 69.93 66.54 65.96 65.01 64.43 64.93 64.48 62.57 62.03 59.61

South Africa 12.77 14.71 15.83 15.01 14.07 13.92 16.30 15.79 15.39 14.62 15.36 15.05 14.40 13.79 14.01 13.92 13.88 13.60

Memo: U.S. nominal effective rate

(index) 114.7 119.7 120.3 117.5 118.4 122.5 121.8 120.7 118.4 116.5 117.8 118.2 118.9 117.8 118.6 119.7 124.9 124.6

1 MRV = Most Recent Value.

2016

Nov

0.41

0.00

0.91

-0.31

2.12

0.22

380

201

294

491

475

444

413

1712

2199

1388

18604

863

426

273

230

2330

0.93

108.90

3.33

6.85

16.34

67.60

64.25

13.96

122.9

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 )

Table E: Commodity Prices 2016 MRV 1

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

Energy 2

65 55 43 56 57 64 40 41 47 51 57 59 57 58 58 59 68 77

Non-energy 2

82 80 76 81 82 83 75 76 78 80 81 83 82 82 81 84 84 83

Agriculture 2

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

Metals and minerals 2 68 64 59 62 65 71 56 59 62 63 61 61 65 65 64 73 75 74

Memo items:

Crude oil, average ($/bbl) 51 43 33 45 45 49 30 31 37 41 46 48 44 45 45 45 53 53

Gold ($/toz) 1161 1249 1181 1260 1334 1221 1098 1200 1245 1242 1261 1276 1337 1340 1327 1238 1157 1102

Baltic Dry Index 711 676 363 613 736 994 391 307 390 608 623 608 707 675 826 1080 1031 914

Source: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg. 1MRV = Most Recent Value. 2Indexes, 2010 = 100.

2016

Oct

64

81

90

65

49

1267

870