Global Monthly June 2019

Source: World Bank. Note: Trade is the average of export and import volumes. Aggregate growth rates calculated using constant 2010 U.S. dollar GDP weights. Shaded area indicates forecasts.

Global GDP and trade growth

Overview

As discussed in the June 2019 Global Economic Prospects

report, global growth has been downgraded to 2.6 percent in 2019 amid weaker-than-expected trade and investment.

Emerging market and developing economies (EMDEs) are expected to slow to a four-year low of 4 percent in 2019, alongside subdued investment and export growth.

Risks are *rmly on the downside, in part re+ecting the possibility of destabilizing policy developments, including a further escalation of trade tensions between major economies; renewed *nancial turmoil in EMDEs; and sharper-than-expected slowdowns in major economies.

Chart of the Month

Global trade growth is projected to weaken from 4.1 percent in 2019 to 2.6 percent in 2019—a full percentage point below previous forecasts—amid weaker investment and elevated trade policy uncertainty.

At 2.6 percent, global trade growth is slightly below the pace observed during the 2015-16 trade slowdown, and the weakest since the global *nancial crisis.

Assuming no further escalation in trade tensions, global trade growth is expected to stabilize to 3.2 percent by 2021 as the weakness in manufacturing abates.

Special Focus: Growth in Low-Income Countries—Evolution and Prospects

3e number of low-income countries (LICs) has almost halved since 2001, as rapid growth allowed many of them to

achieve middle-income status.

Prospects for future progression of today’s LICs appear dim in light of greater structural challenges.

Policy measures to address these challenges and boost LIC growth will need to be coordinated and multipronged.

3e Global Monthly is a publication of the Prospects Group. 3is edition was prepared by Patrick Kirby and Collette Wheeler, based on contributions from Peter Nagle, Julia Nor+eet, Rudi Steinbach, Marc Stocker, Temel Taskin, Ekaterine Vashakmadze, Dana Vorisek, Jinxin Wu, and Sandy Ye. 3is Global Monthly re+ects data available up to June 26. For more information, visit: www.worldbank.org/en/research/brief/economic-monitoring.

Table of Contents

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

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

Recent 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

2

June 2019

Global activity: downgraded. Global economic activity has

softened in 2019, with trade and manufacturing showing signs of

marked weakness (Figure 1.A). As a result, global growth in 2019

was downgraded to 2.6 percent in the June 2019 Global Economic

Prospects report, 0.3 percentage point below previous forecasts.

Incoming data point to subdued growth in 19Q2, with the global

manufacturing PMI in May falling to its lowest level since

October 2012 and below the threshold indicating expansion.

Business optimism in manufacturing has softened and could be

further dampened by uncertainty about global trade prospects

and rising trade tensions. As recent softness abates, global growth

is projected to edge up to 2.7 percent in 2020 and to 2.8 percent

in 2021 (Figure 1.B). Slowing activity in advanced economies and

China is expected to be accompanied by a modest cyclical

recovery in major commodity exporters and in a number of

EMDEs aHected by recent *nancial market pressure.

Global trade: heightened uncertainty. Global goods trade growth

continues to show signs of weakness, with new export orders in

May remaining in contractionary territory for the ninth

consecutive month. In mid-June, India announced retaliatory

tariHs on a list of more than 20 U.S. goods after losing

preferential access to the U.S. market. 3e G20 meetings in

Osaka at the end of June are expected to provide information

about the direction of U.S.-China trade negotiations. 3e forecast

for global trade growth in 2019 has been revised down a full

percentage point, to 2.6 percent—slightly below the pace

observed during the 2015-16 trade slowdown, and the weakest

since the global *nancial crisis. As demand from major economies

moderates, export growth is expected to slow across EMDE

regions in 2019 (Figure 1.C). An exception is Sub-Saharan Africa,

where it is expected to recover modestly from earlier supply

disruptions in key commodity-producing sectors. 3e weakness in

export growth this year is projected to be particularly pronounced

in the Middle East and North Africa, re+ecting oil production

cuts in OPEC countries and U.S. sanctions on the Islamic

Republic of Iran. Overall, export growth in 2019 is expected to

be below historical averages in more than 80 percent of EMDEs.

Global �nancing conditions: still favorable. Amid signs of

deterioration in global economic prospects and persistently low

in+ation, major central banks have adopted more accommodative

monetary policy stances. Some easing of external *nancing

pressures has also allowed several EMDE central banks to cut

interest rates or put their tightening cycles on hold. Over the last

Monthly Highlights

FIGURE 1.B Global GDP growth

FIGURE 1.C Export volume growth, by EMDE region

Source: Haver Analytics, World Bank. A. Manufacturing and new export orders are measured by Purchasing Managers’ Index (PMI). PMI readings above 50 indicate expansion in economic activity; readings below 50 indicate contraction. Black horizontal line indicates expansionary threshold. Last observation is May 2019. B.C. EMDEs = emerging market and developing economies. EAP = East Asia and Pacific, ECA = Europe and Central Asia, LAC = Latin America and the Caribbean, MNA = Middle East and North Africa, SAR = South Asia, and SSA = Sub-Saharan Africa. Aggregate growth rates calculated using constant 2010 U.S. dollar GDP weights. Shaded areas indicate forecasts.

FIGURE 1.A Global manufacturing and new export orders

3

June 2019

twelve months, U.S. and Euro Area yields have fallen by 60 to 90

basis points (Figure 2.A). 3e share of bonds yielding negative

market interest rates increased to its highest level since mid-2016,

reaching more than 25 percent globally and nearly 50 percent in

Europe and Japan (Figure 2.B). After falling sharply in May,

global equity prices stabilized in early June, but bond prices

rose in tandem over renewed concerns regarding trade

tensions—driving down yields in advanced economies.

EMDE �nancing conditions: some stabilization. Heightened

*nancial market volatility and trade policy uncertainty have

weighed on investor appetite for EMDE assets in recent months,

with EMDE bond spreads rising to a 5-month high at the start of

June before receding somewhat. International bond issuance and

portfolio +ows to EMDEs softened in May but showed tentative

signs of stabilization in June. Equity prices have recovered

somewhat in early June, and currency pressures have waned, as

prospects of greater monetary policy accommodation in the

United States buoyed sentiment.

Commodity markets: volatile oil prices. Industrial commodity

prices declined in May and into June, re+ecting concerns about

slowing global growth, compounded by growing trade tensions

(Figure 2.C). Oil prices fell sharply, with the Brent crude oil price

declining from $72/bbl in mid-May to $61/bbl in early June—a

15 percent decline. Estimates of global oil demand were revised

down further in 2019, with the U.S. Energy Information

Administration lowering its oil demand forecast to 1.2 million

barrels per day (mb/d) and OPEC dropping forecasts to

1.1 mb/d. However, oil prices saw a small spike in mid-June after

an attack on two oil tankers in the Middle East. Base metals

prices have fallen around 2 percent, on average, since mid-May.

In contrast, agricultural prices, particularly grains, have risen on

supply concerns, with adverse weather conditions in the United

States severely disrupting the planting season. Since the end of

April, wheat and corn prices have risen by roughly 28 percent.

United States: mixed signals. Incoming data suggest

consumption growth remains resilient, with retail sales rising 0.5

percent (m/m) in May—however, this is expected to be a

temporary boost as growing trade tensions weigh on consumer

con*dence (Figure 3.A). Manufacturing activity appears to be

softening in 19Q2—industrial production, durable goods

shipments, and the manufacturing PMI have shown signs of

slowing. 3e labor market may also be moderating—the economy

added 75 thousand jobs in May, dropping the 3-month average

gain to 150 thousand, down from almost 250 thousand at the

FIGURE 2.B Share of bonds trading with negative interest rates

FIGURE 2.A U.S. and German 10-year government bond yields

FIGURE 2.C Commodity price indexes, monthly

Source: Bloomberg, World Bank. A. Figure shows weekly data. Last observation is June 26, 2019. B. Last observation is June 2019, which includes data through June 26, 2019. C. Indexes are based on nominal U.S. dollars. Last observation is May 2019.

4

June 2019

beginning of the year. In+ation remains well below target, with

core PCE in+ation at 1.6 percent and headline at 1.5 percent

(y/y) in May. U.S. growth is expected to slow to 2.5 percent in

2019 and further decelerate to 1.7 percent in 2020 and 1.6

percent in 2021, as the eHects of *scal stimulus wane. Recent

tariH increases and associated retaliatory actions are expected to

weigh on activity, but this is being oHset by accommodative

monetary policy and by sustained increases in productivity

growth and labor force participation.

Euro Area: continued weakness. Economic conditions in the

Euro Area remain weak, particularly in the manufacturing sector

(Figure 3.B). Despite an uptick in GDP growth in 19Q2,

industrial activity remains tepid and economic sentiment fell to a

seven-month low in June. Industrial production contracted by

0.5 percent in April (m/m), and the manufacturing PMI

remained low at 47.7 in May, while in+ation expectations have

been trending down. Growth is projected to slow from 1.8

percent in 2018 to 1.2 percent in 2019 and to edge up to an

average of 1.4 percent in 2020-21. Relative to previous

projections, this represents a downgrade of 0.4 percentage point

in 2019 and 0.1 percentage point in 2020, re+ecting weakness in

trade and domestic demand that will not be fully oHset by

accommodative *scal and monetary policy.

United Kingdom: continued uncertainty. Following a rapid

build-up of inventories in the *rst quarter due to Brexit-related

uncertainty, recent data point to weakness. Industrial production

fell 2.7 percent in April, the second largest monthly decline since

the global *nancial crisis, while the manufacturing PMI fell below

50—the *rst since 2016 (Figure 3.C). Prime Minister May will

stay on until a replacement is chosen, likely in late-July. 3e

eventual resolution of Brexit remains unclear, but the odds of a

no-deal or hard Brexit have increased.

Japan: trade weakness. Activity in Japan bene*ted from

government support in the *rst half of 2019, as well as a rebound

following natural disasters last year, but remains lackluster.

Growth in 2019 is expected to be 0.8 percent, down from

previous projections due to weaker-than-expected external

demand. A variety of *scal measures are expected to soften the

near-term impact of the VAT hike in October. With the

economy near full employment and potential output constrained

by low labor force growth, capacity constraints will slow activity

to a projected 0.7 percent in 2020 and 0.6 percent in 2021.

China: deteriorating sentiment. Activity indicators were mixed in

May following the escalation of trade tensions with the United

FIGURE 3.B Industrial production growth and manufacturing PMI in the Euro Area

FIGURE 3.A U.S. nominal retail sales growth and consumer confidence

FIGURE 3.C United Kingdom industrial production growth and manufacturing PMI

Source: Haver Analytics, University of Michigan, World Bank. A. Retail sales are 3-month moving averages. Last observation is June 2019 for consumer confidence and May 2019 for retail sales. B.C. PMI=Purchasing Managers’ Index. PMI readings above 50 indicate expansion in economic activity; readings below 50 indicate contraction. Last observation is April 2019 for industrial production and May 2019 for manufacturing PMI.

5

June 2019

States. 3e oMcial manufacturing PMI fell to 49.4—its third

sub-50 reading this year—as export orders declined markedly,

while the non-manufacturing PMI remained unchanged at 54.3

(Figure 4.A). In+ation rose to 2.7 percent (y/y) in May due to

continued food price pressures. After falling sharply in May,

China’s equity markets showed signs of stabilization in early June

amid signals that the central bank would ease policy further if

trade tensions deepen. Growth is projected to decelerate from 6.6

percent in 2018 to 6.2 percent in 2019, re+ecting softening

manufacturing activity and trade. 3e recent increase in tariHs on

trade with the United States is projected to weigh on growth in

2020, which has been revised down to 6.1 percent.

Major commodity exporters: slowdown. 3e recovery in

commodity exporters remains fragile in some larger economies

(Figure 4.B). Activity in South Africa contracted at its fastest pace

in a decade in 19Q1, and sluggish manufacturing PMI in May

suggests the recovery in 19Q2 could be subdued. In Brazil, GDP

growth contracted by 0.2 percent in 19Q1 (q/q saar), re+ecting

weakness in the industrial sector. In Russia, GDP growth

contracted for the *rst time since 17Q4, shrinking 1.7 percent in

19Q1 (q/q saar) amid weak industrial activity. Moderating

in+ationary pressure allowed the central bank to ease policy for

the *rst time in a year. In contrast, the manufacturing PMI in

Nigeria remained broadly unchanged in May, despite softer

inventories and new orders. In Saudi Arabia, the non-oil sector

PMI increased further in May, to 57.3, the highest level since

January 2018. 3e manufacturing PMI in Indonesia also rose to a

nine-month high of 51.6 in May as new orders strengthened.

Major commodity importers: diverging activity. Growth in

commodity importers slowed in 19Q1 and industrial activity

points to softness in 19Q2. 3e manufacturing PMI remains

weak in Poland, with May registering the seventh consecutive

month of contraction amid soft new export orders (Figure 4.C).

In Egypt, the manufacturing PMI softened in May, while food

price pressures lifted in+ation to 14 percent (y/y). 3e

manufacturing PMI in 1ailand fell to 50.7 in May from an

eleven month-high in April. In Mexico, consumer con*dence,

along with manufacturing and non-manufacturing PMIs,

weakened in May, suggesting that activity will remain tepid after

shrinking 0.7 percent (q/q saar) in 19Q1. In contrast, the

manufacturing PMI in India rose to 52.7 in May but remained

below the level of early 2019. 3e central bank eased its policy

stance further in June. In Turkey, growth accelerated to 5.2

percent (q/q saar) in 19Q1, following three quarters of

contraction. However, industrial activity and the manufacturing

PMI have continued to decline in 19Q2.

FIGURE 4.B Manufacturing PMI in major EMDE commodity exporters

FIGURE 4.A GDP growth and manufacturing PMI in China

FIGURE 4.C GDP growth in EMDEs

Source: Haver Analytics, World Bank. A.B. PMI=Purchasing Managers’ Index. PMI readings above 50 indicate expansion in economic activity; readings below 50 indicate contraction. Last observation for manufacturing PMI is May 2019. A.C. Last observation is 2019Q1 for GDP. B. Manufacturing PMI is weighted using 2010 constant U.S. dollars. Sample includes Brazil, Russia, and South Africa. C. Aggregate growth rates calculated using constant 2010 U.S. dollar GDP weights.

6

June 2019

FIGURE 5.B Resource production in LICs of 2001

FIGURE 5.A LIC poverty rates and headcounts

FIGURE 5.C MDRI and HIPC relief in LICs of 2001

Source: International Monetary Fund, United Nations, World Bank, World Bureau of Metal Statistics. A. Latest reflects 2015 data. Due to data limitations, poverty share for “LICs turned MICs” includes 26 of 32 countries and reflects 94.1 percent of the sample population in 2015; “Continued LICs” includes 25 of 32 countries and reflects 79.8 percent of the sample population. C. Committed debt relief under the assumption of full participation of creditors. Bars represent average debt relief per region in US$ billions for all HIPC and MDRI LICs. Diamonds reflect average debt relief per region relative to countries’ GDP.

Fewer Low-Income Countries (LICs) since 2001. As discussed in the latest Global Economic Prospects report, there are currently 34 countries classi*ed as low-income, about half the number in 2001. 3is Special Focus explores the factors that buoyed LIC growth since 2001, how those factors supported LIC progression to middle-income (MIC) status, and what the prospects for future progression of today’s LICs are.

Rapid growth in LICs. 3e countries classi*ed as LICs in 2001 registered generally rapid growth between 2001-18. 3ose that reached MIC status, in particular, averaged growth of 5.8 percent per year—about one-quarter faster than those 2001 LICs that have remained in the group and one-half faster than non-LIC EMDEs, although with wide heterogeneity.

Poverty reduction. Strong growth among the 2001 LICs contrib-uted to poverty reduction, with the share of extreme poor in the population of 2001 LICs falling by 16 percentage points, on average (Figure 5.A). 3e fall in LIC poverty rates has accounted for about one third of the decline in the global poverty headcount between 2001 and 2015.

Drivers of rapid LIC growth. Several factors helped bolster LIC growth. 3e commodity price boom of 2001-11 fueled unprece-dented investment in commodity exploration and production (Figure 5.B); higher export earnings helped improve *scal positions. Nine of the 2001 LICs experienced deep recessions during the 1990s as they transitioned from centrally planned to market-based economies during the 1990s; by the early 2000s these countries were experiencing strong rebounds, supported by growth-enhancing reforms amid solid foundations of human and physical capital. Con+icts receded among some of the LICs in Africa, where con+ict-related casualties have been on a steady decline since the 1990s. 3e MDRI and HIPC debt relief initia-tives helped put public *nances on a sounder footing (Figure 5.C). Greater trade integration supported export growth, attract-ed stronger FDI in+ows, and encouraged reforms. Most 2001 LICs boosted their investment in human and physical capital, with secondary education net enrollment ratios almost doubling and the investment-to-GDP ratio increasing by 5 percentage points since 2001 (Figure 6.A). Business climates improved, helped by strengthening of the rule of law. And *scal manage-ment and monetary policy frameworks have been enhanced.

Drivers of rapid growth in LICs turned MICs. However, these factors were of greater bene*t to the 2001 LICs that became

Special Focus: Growth in Low-Income Countries—Evolution and Prospects

7

June 2019

FIGURE 6.B Share of agriculture in the economy

FIGURE 6.A Average secondary-school enrollment rates

FIGURE 6.C Projections of global extreme poverty

Source: World Bank, World Development Indicators. A. 2010s includes data up to 2017. 2001 LICs, “LICs turned MICs,” and “Continued LICs,” include 55, 26, and 29 countries, respectively. B. Unweighted averages. C. Data based on global real per capita growth. 8 percent growth assumes average annual growth in per capita incomes of 6 percent for all countries, but that incomes of the bottom 40 percent of the distribution grow at 8 percent, while those in the top 60 percent grow at 4.7 percent.

MICs than those that remain LICs today. On average, policy frameworks, governance, and business environments were strong-er among the LICs that progressed. 3ese countries also had bet-ter-developed infrastructure, more notable improvements in hu-man capital, and larger *scal resources. 3ey also bene*ted from more favorable initial conditions, as the average per capita income was about 80 percent higher than that of the LICs that remained and much closer to the MIC threshold. 3e countries that became MICs also had a geographical advantage, as around one-third were landlocked compared to almost half of today’s LICs.

Challenges of today’s LICs. Prospects for continued progression of LICs to MIC status appear more challenging. Per capita incomes in today’s LICs are further below the middle-income threshold than were the incomes of the LICs of 2001 that subsequently became MICs. Most of today’s LICs are fragile, compared to one-third of 2001 LICs that turned MICs. 3ose that are not fragile, face a geographical disadvantage, with more than half of them being landlocked, and mostly among other LICs or countries with per capita incomes not far above the middle-income threshold. Today’s LICs rely heavily on agricul-ture, making them more vulnerable to extreme weather events (Figure 6.B). Furthermore, debt among today’s LICs has been rising, and larger interest burdens owing to greater indebtedness often absorb revenues that could otherwise be used for growth-enhancing infrastructure development and poverty-reducing expenditures on health and education.

Prospects for poverty reduction in today’s LICs. Poverty allevia-tion among today’s LICs will be more challenging amid these sub-dued prospects for lifting per capita incomes to middle-income levels. Poverty rates exceed 40 percent among today’s LICs, and per capita growth is expected to fall well short of the 8 percent needed to reach the Sustainable Development Goal of reducing global extreme poverty to 3 percent by 2030 (Figure 6.C).

Policy options. Policy measures to boost LIC growth will need to be coordinated and multipronged. Such measures include greater integration into global trade, encouraging export diversi*cation, and attracting stronger foreign direct investment. 3ese speci*c measures can help strengthen domestic skills and technologies but will need to be accompanied by investments in human capital and infrastructure upgrades—without exacerbating existing *scal vulnerabilities. Further measures that could bolster LIC growth include greater *nancial inclusion along with the strengthening of *nancial systems, mobilizing domestic resources to support sustainable government *nances, improving governance and business climates to foster stronger private sector activity, and enhanced competition policies to raise productivity and international competitiveness.

8

June 2019

Recent Prospects Group Publications Global Economic Prospects - June 2019: Heightened Tensions, Subdued Investment

Commodity Markets Outlook - April 2019: Food Price Shocks: Channels and Implications

Global Economic Prospects - January 2019: Darkening Skies

Inflation in Emerging and Developing Economies: Evolution, Drivers and Policies

Commodity Markets Outlook - October 2018: The Changing of the Guard: Shifts in Commodity Demand

Recent World Bank Working Papers Search for Yield in Large International Corporate Bonds: Investor Behavior and Firm Responses

Monetary Policy in Fossil Fuel Exporters: The Curse of Horizons

Measuring the Full Extent of Fiscal Losses and Gains

How Much Does Reducing Inequality Matter for Global Poverty?

Migration and Jobs: Issues for the 21st Century

Trade Integration and Growth: Evidence from Sub-Saharan Africa

The Economics of Sustainability: Causes and Consequences of Energy Market Transformation

The Changing Pattern of Returns to Education: What Impact Will This Have on Inequality

Does Rainfall Matter for Economic Growth ? Evidence from Global Sub-National Data (1990-2014)

Recent World Bank Reports Women, Business and the Law

Beyond the Gap: How Countries Can Afford the Infrastructure They Need while Protecting the Planet

Fiscal Policies for Development and Climate Action

Doing Business 2019: Training for Reform

World Development Report 2019: The Changing Nature of Work

Atlas of Sustainable Development Goals 2018

Fair Progress? Economic Mobility Across Generations Around the World

TABLE A: Major Data Releases (Percent change, y/y)

Recent releases: May 27, 2019 - June 26, 2019 Upcoming releases: June 27, 2019 - July 26, 2019

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

France 5/29/19 GDP Q1 1.2% 1.2% Germany 6/27/19 CPI JUN 1.3%

Brazil 5/30/19 GDP Q1 0.5 % 1.1 % South Korea 6/27/19 IP MAY -0.1 %

Germany 5/31/19 CPI MAY 1.3% 1.9% United Kingdom 6/28/19 GDP Q1 1.8 %

India 5/31/19 GDP Q1 5.8 % 6.6 % Indonesia 7/1/19 CPI JUN 3.3 %

Italy 5/31/19 GDP Q1 -0.1 % 0.0 % Brazil 7/2/19 IP MAY -3.9 %

Turkey 5/31/19 GDP Q1 -2.6 % -3.0% Germany 7/8/19 IP MAY -1.9%

South Korea 6/3/19 GDP Q1 1.6% 3.0% Mexico 7/9/19 CPI JUN 4.3%

Turkey 6/3/19 CPI MAY 18.7 % 19.5 % United Kingdom 7/10/19 IP MAY -1.1%

Australia 6/4/19 GDP Q1 1.8 % 2.4% United States 7/11/19 CPI JUN 1.8 %

South Africa 6/4/19 GDP Q1 0.0 % 1.1% India 7/12/19 IP MAY 3.4 %

Euro Area 6/6/19 GDP Q1 1.2 % 1.2% Japan 7/12/19 IP MAY -1.3%

Indonesia 6/10/19 CPI MAY 3.3 % 2.8 % Turkey 7/12/19 IP MAY -4.0 %

China 6/11/19 CPI MAY 2.7 % 2.5 % Euro Area 7/12/19 IP MAY -0.4 %

United States 6/12/19 CPI MAY 1.8 % 2.0 % Mexico 7/12/19 IP MAY -0.4 %

France 6/14/19 CPI MAY 0.9 % 1.3 % China 7/14/19 IP JUN 4.9%

Euro Area 6/18/19 CPI MAY 1.3% 1.6% United States 7/16/19 IP JUN 2.0 %

South Africa 6/19/19 CPI MAY 4.4% 4.4 % China 7/16/19 GDP Q2 6.4 %

Canada 6/19/19 CPI MAY 2.3% 2.1% Euro Area 7/17/19 CPI JUN 1.3%

New Zealand 6/19/19 GDP Q1 2.9% 2.5% Ireland 7/19/19 GDP Q1 2.6%

United Kingdom 6/19/19 CPI MAY 2.0 % 2.1 % Malaysia 7/24/19 CPI JUN 0.2 %

Japan 6/20/19 CPI MAY 0.7 % 0.9 % South Africa 7/24/19 CPI JUN 4.4%

(Percent change y/y)

9

June 2019

TABLE B: Activity and Inflation (Percent change y/y, except quarterly data on industrial production, which are percent change q/q, annualized)

Sources: Haver Analytics, IMF International Financial Statistics, World Bank. 1 Industrial production is total production (may exclude construction). When data are unavailable, "industrial production, manufacturing" is used as a proxy. 2 Median inflation rate for each grouping.

TABLE C: Trade and Finance

Sources: Haver Analytics, IMF International Financial Statistics, World Bank. 1Total reserves excluding gold are used as proxies when total reserves data are unavailable.

2018 2019 2018

2017 2018 Q2 Q3 Q4 Q1 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Industrial production, sa 1

World 4.1 3.6 2.7 2.6 1.7 1.9 3.9 3.5 3.8 3.5 3.4 3.8 2.2 1.7 2.2 1.9 2.5 1.6

Advanced economies 2.8 2.2 2.5 1.6 0.6 -2.1 2.5 2.5 2.2 2.4 2.3 2.4 0.7 0.2 1.3 0.6 0.0 -0.1

Emerging market and developing economies 5.3 5.0 2.8 3.6 2.8 5.8 5.3 4.6 5.5 4.5 4.5 5.1 3.7 3.3 3.1 3.1 5.0 3.2

Commodity-exporting EMDEs 2.5 2.6 -1.5 4.2 0.8 0.1 1.7 0.6 3.0 2.3 1.4 3.6 2.0 1.3 0.8 0.7 1.1 0.2

Other EMDEs 6.2 5.7 4.0 3.4 3.3 7.3 6.3 5.7 6.2 5.1 5.3 5.5 4.1 3.8 3.7 3.7 6.0 4.1

East Asia and Pacific 6.3 6.0 4.6 3.5 5.6 9.2 6.7 4.9 5.9 5.7 5.4 6.1 5.4 5.4 4.9 4.5 7.7 4.6

East Asia excl. China 4.7 4.6 -1.4 5.5 5.1 -1.7 5.9 -1.2 5.2 3.2 2.6 7.3 4.5 3.0 3.0 -0.5 3.1 -0.2

Europe and Central Asia 6.0 4.5 2.6 2.4 -3.3 4.6 5.7 4.7 5.9 3.8 3.4 3.0 1.8 -0.1 0.4 1.9 2.3 1.6

Latin America and Caribbean 0.8 1.0 -2.3 1.2 -4.8 -2.2 -1.0 2.2 1.6 1.3 0.3 0.5 -0.7 -2.6 -2.0 -1.4 -2.8 -2.4

Middle East and North Africa - - - - - - - - - - - - - - - - - -

South Asia 4.6 5.5 -2.5 8.0 5.3 -4.7 4.6 6.3 7.8 2.7 6.3 8.6 1.6 2.4 2.1 1.2 0.8 3.6

Sub-Saharan Africa 0.1 1.7 -0.4 9.7 5.0 -9.4 1.7 2.1 2.9 1.9 2.5 3.5 1.7 0.8 1.0 1.0 0.8 5.2

Inflation, sa 2

World 2.3 2.4 2.3 2.6 2.2 1.9 2.3 2.4 2.4 2.5 2.4 2.6 2.3 2.0 1.9 1.9 2.1 2.2

Advanced economies 1.4 1.7 1.8 2.1 2.0 1.5 1.8 2.1 2.1 2.1 2.1 2.2 2.0 1.6 1.5 1.5 1.7 1.8

Emerging market and developing economies 3.2 2.9 3.0 3.0 2.8 2.6 2.9 3.0 3.0 3.1 3.0 3.3 2.8 2.2 2.2 2.4 2.8 3.0

Commodity-exporting EMDEs 3.3 2.8 2.9 2.9 2.7 2.6 2.8 2.6 2.6 2.9 2.9 2.7 2.7 2.2 2.4 2.6 2.6 2.8

Other EMDEs 2.9 3.1 3.0 3.1 3.2 2.5 2.9 3.1 3.4 3.3 3.3 3.7 2.9 2.3 2.1 2.4 2.9 3.1

East Asia and Pacific 2.9 3.2 3.8 4.1 3.3 2.2 3.5 3.8 3.8 3.6 3.5 3.2 2.5 1.8 1.7 2.0 2.4 2.7

Europe and Central Asia 2.4 2.6 2.2 2.8 2.0 2.5 2.2 2.3 2.4 3.0 2.4 2.2 1.9 1.8 2.1 2.4 2.9 3.3

Latin America and Caribbean 2.6 2.3 2.3 2.8 2.4 2.4 2.0 2.4 2.6 2.5 2.2 3.0 2.4 2.3 2.2 2.2 2.5 2.8

Middle East and North Africa 1.6 2.5 2.7 2.2 1.8 0.7 2.8 2.8 2.7 2.3 2.1 2.0 2.1 2.1 0.9 0.3 0.8 0.7

South Asia 3.8 3.9 4.4 4.1 4.1 5.5 4.1 4.5 4.4 4.0 3.9 4.7 3.8 5.4 5.4 5.5 5.6 5.6

Sub-Saharan Africa 5.4 3.6 3.6 3.3 4.1 3.9 3.6 4.0 3.1 3.3 3.8 4.1 3.9 3.5 3.9 3.9 3.9 4.0

2019

2018 2019 2018

2017 2018 Q2 Q3 Q4 Q1 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Exports, nominal, US$, sa

World 10.4 9.5 -2.1 -1.8 -2.3 -3.8 10.8 10.1 11.9 6.9 4.5 10.9 2.4 -2.3 -0.3 -5.2 -2.0 -3.0

Advanced economies 9.7 8.3 -2.8 -4.7 -1.9 -4.5 9.6 9.3 10.1 5.1 1.4 9.1 0.8 -3.1 -2.6 -3.0 -4.8 -4.0

Emerging market and developing economies 11.8 11.8 -0.6 3.5 -3.0 -2.4 13.2 11.5 15.3 10.3 10.5 14.2 5.3 -0.7 4.1 -8.9 3.4 -1.2

Commodity-exporting EMDEs 17.6 14.8 -2.0 10.2 2.9 -19.4 15.4 16.2 22.8 13.4 9.7 18.5 8.9 3.4 -2.0 -1.3 -4.7 -1.6

Other EMDEs 9.5 10.5 -0.3 1.0 -5.3 4.9 12.2 9.6 12.3 9.0 10.8 12.5 3.9 -2.3 6.6 -11.7 6.7 -1.0

East Asia and Pacific 10.0 10.4 0.2 1.6 -8.8 2.1 11.6 10.5 12.6 9.0 11.1 13.6 3.0 -3.6 6.4 -16.3 8.5 -2.3

Europe and Central Asia 16.6 16.5 0.7 1.7 5.6 -4.8 19.9 14.0 23.7 13.5 11.1 16.5 10.9 3.2 -1.3 4.9 -1.4 -0.1

Latin America and Caribbean 11.9 9.2 -6.6 9.7 4.7 -10.9 7.4 6.5 12.4 9.5 6.0 10.3 7.6 3.2 3.1 -1.5 -5.0 0.8

Middle East and North Africa - - - - - - - - - - - - - - - - - -

South Asia 5.6 10.3 7.5 21.1 5.4 0.7 19.9 4.7 14.1 3.3 22.7 18.3 6.2 4.6 8.7 11.5 5.1 2.5

Sub-Saharan Africa 14.7 12.0 -5.7 12.8 -5.5 -15.4 14.3 16.2 16.7 12.5 9.8 14.6 5.3 0.3 -0.3 -4.4 -7.0 -

Imports, nominal, US$, sa

World 12.5 11.8 1.3 4.4 -0.2 -28.1 3.9 10.5 13.3 2.3 26.9 14.5 3.2 1.5 -5.1 -12.1 -2.4 -5.9

Advanced economies 9.7 9.7 -1.8 -0.1 3.8 -12.6 9.7 9.2 13.4 7.7 4.7 12.5 3.3 0.0 -1.9 -3.5 -3.2 -1.6

Emerging market and developing economies 13.8 12.7 2.6 6.4 -1.9 -33.9 1.7 11.0 13.3 0.0 37.9 15.4 3.1 2.1 -6.5 -15.6 -2.0 -7.7

Commodity-exporting EMDEs 13.0 12.7 6.7 6.6 2.3 -42.9 -2.0 10.7 11.9 -3.7 48.4 15.6 3.0 4.2 -8.0 -18.8 -1.0 -10.6

Other EMDEs 16.5 12.7 -10.0 5.6 -15.0 5.9 16.9 12.0 18.6 12.5 9.2 14.7 3.3 -5.2 -1.9 -4.5 -5.2 2.5

East Asia and Pacific 17.6 14.9 -12.9 11.9 -19.2 6.6 21.0 12.0 21.7 16.8 12.0 19.5 4.7 -5.3 -0.7 -6.7 -5.8 3.3

Europe and Central Asia 18.6 7.9 -15.1 -16.4 -1.0 8.7 9.9 7.9 6.9 -0.7 -1.3 1.9 -2.1 -8.7 -7.3 -4.0 -8.3 -1.7

Latin America and Caribbean 6.0 12.3 5.0 10.8 -1.1 -5.6 12.5 9.8 23.3 13.7 6.3 16.2 11.6 1.5 7.1 0.0 -0.7 0.5

Middle East and North Africa - - - - - - - - - - - - - - - - - -

South Asia 22.7 13.1 5.7 14.8 -15.0 -12.8 14.5 20.7 25.0 20.9 12.7 16.7 3.6 -0.1 -1.3 -6.0 -0.6 2.9

Sub-Saharan Africa 4.3 12.3 -11.2 4.1 10.3 - 10.4 9.2 22.0 8.9 9.3 19.3 14.0 -3.1 - - - -

International reserves, US$1

World 7.2 -0.4 -1.2 -0.6 0.1 1.6 -0.5 -0.2 0.0 -0.1 -0.5 -0.8 0.4 0.5 0.6 0.1 0.8 0.2

Advanced economies 10.0 0.6 -0.8 0.0 0.1 1.5 -0.2 0.4 -0.1 0.1 0.0 -0.7 0.4 0.4 0.8 -0.1 0.8 -

Emerging market and developing economies 5.3 -1.1 -1.5 -1.1 0.2 1.6 -0.7 -0.6 0.0 -0.3 -0.9 -0.9 0.5 0.6 0.5 0.3 0.8 0.2

Commodity-exporting EMDEs 3.6 - -0.5 -1.0 - - -0.4 -0.8 -0.2 0.2 -1.0 -0.3 0.5 - - - - -

Other EMDEs 6.1 -2.1 -2.0 -1.1 0.0 1.4 -0.8 -0.6 0.2 -0.5 -0.8 -1.1 0.4 0.7 0.6 0.3 0.4 0.0

East Asia and Pacific 5.6 -2.1 -1.4 -1.0 -0.1 1.2 -0.5 -0.3 0.1 -0.2 -0.8 -1.0 0.4 0.6 0.6 0.2 0.3 -0.1

Europe and Central Asia 10.3 3.9 -3.3 -0.9 4.0 1.5 -1.2 -1.6 0.9 -1.1 -0.8 -0.2 1.6 2.6 0.7 0.8 0.0 0.4

Latin America and Caribbean 2.2 -1.0 -1.9 -1.1 0.2 2.9 -0.3 -1.4 0.3 -0.2 -1.2 -0.1 0.5 -0.2 0.9 0.9 1.0 -0.1

Middle East and North Africa - - - - - - - - - - - - - - - - - -

South Asia 11.8 -4.8 -3.8 -2.1 -1.3 4.5 -2.4 -1.2 -0.7 -0.7 -0.8 -1.9 -0.1 0.6 0.9 0.6 2.9 1.5

Sub-Saharan Africa 10.4 - 1.0 -6.3 - - 2.1 -1.9 -0.2 -3.3 -3.0 -3.0 0.3 - - - - -

2019

(Percent change y/y, except quarterly trade data, which are percent change q/q, annualized, and international reserves data, which are percent change over the previous period)

10

June 2019

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

TABLE E: Commodity Prices

2018 2019 2018 MRV 1

2017 2018 Q2 Q3 Q4 Q1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Interest rates and LIBOR (percent)

U.S. Fed Funds Effective 0.97 1.78 1.67 1.88 2.16 2.38 1.77 1.88 1.88 1.90 2.13 2.13 2.22 2.38 2.38 2.38 2.38 2.38 2.38

ECB repo 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

US$ LIBOR 3-months 1.26 2.31 2.34 2.34 2.63 2.69 2.33 2.34 2.32 2.35 2.46 2.65 2.79 2.78 2.68 2.61 2.59 2.53 2.31

EURIBOR 3-months -0.33 -0.32 -0.33 -0.32 -0.32 -0.31 -0.32 -0.32 -0.32 -0.32 -0.32 -0.32 -0.31 -0.31 -0.31 -0.31 -0.31 -0.31 -0.35

US 10-yr Treasury yield 2.33 2.91 2.92 2.92 3.03 2.65 2.91 2.89 2.89 3.00 3.16 3.12 2.83 2.71 2.68 2.57 2.53 2.39 2.00

German Bund, 10 yr 0.37 0.39 0.42 0.28 0.29 0.04 0.33 0.25 0.26 0.35 0.37 0.32 0.19 0.12 0.02 -0.03 -0.10 -0.17 -0.37

Spreads (basis points)

JP Morgan Emerging Markets 325 360 351 378 402 382 377 366 383 386 377 405 423 402 373 371 364 377 370

Asia 164 183 185 189 202 189 197 193 185 189 190 204 211 199 185 183 177 185 181

Europe 243 281 275 313 316 312 301 291 329 318 299 316 334 319 303 314 324 334 313

Latin America & Caribbean 429 471 455 487 523 500 486 471 493 498 492 528 549 519 493 488 486 505 511

Middle East 385 439 429 464 497 438 472 451 464 478 453 497 541 562 400 351 293 287 274

Africa 376 407 385 440 481 460 436 420 445 455 445 485 515 489 444 445 444 482 469

Stock Indices (end of period)

Global (MSCI) 508 456 505 524 456 509 505 520 524 524 484 491 456 491 503 509 525 492 523

Advanced Economies ($ Index) 2086 1884 2089 2184 1884 2108 2089 2153 2179 2184 2019 2041 1884 2028 2086 2108 2179 2046 2178

United States (S&P 500) 2668 2507 2718 2923 2507 2830 2718 2816 2902 2923 2712 2760 2507 2702 2798 2830 2939 2752 2950

Europe (S&P Euro 350) 1558 1368 1533 1548 1368 1535 1533 1581 1547 1548 1454 1450 1368 1452 1507 1535 1583 1493 1562

Japan (Nikkei 225) 22530 20019 22305 24021 20019 21206 22305 22554 22788 24021 21920 22351 20019 20773 21580 21206 22163 20601 21259

Emerging Market and Developing Economies (MSCI)

1139 966 1070 1048 966 1058 1070 1087 1055 1048 954 995 966 1050 1051 1058 1079 998 1053

EM Asia 577 485 552 537 485 538 552 553 546 537 476 503 485 521 529 538 548 498 525

EM Europe 341 292 312 313 292 314 312 319 294 313 293 301 292 325 318 314 321 324 340

EM Europe & Middle East 275 246 253 259 246 259 253 263 246 259 247 252 246 270 263 259 266 263 276

EM Latin America & Caribbean 2811 2566 2477 2577 2566 2746 2477 2702 2466 2577 2684 2600 2566 2948 2821 2746 2749 2684 2879

Exchange Rates (LCU / USD)

Advanced Economies

Euro Area 0.89 0.85 0.84 0.86 0.88 0.88 0.86 0.86 0.87 0.86 0.87 0.88 0.88 0.88 0.88 0.88 0.89 0.89 0.89

Japan 112.11 110.34 109.16 111.52 112.74 110.17 110.13 111.45 111.03 112.09 112.76 113.40 112.06 108.96 110.43 111.11 111.65 109.87 108.45

Emerging and Developing Economies

Brazil 3.19 3.65 3.61 3.95 3.81 3.77 3.79 3.82 3.93 4.10 3.76 3.80 3.89 3.74 3.72 3.84 3.90 4.00 3.90

China 6.76 6.61 6.38 6.81 6.92 6.75 6.47 6.72 6.85 6.86 6.93 6.94 6.88 6.79 6.74 6.71 6.72 6.86 6.93

Egypt 17.85 17.82 17.80 17.90 17.92 17.61 17.88 17.90 17.88 17.92 17.92 17.93 17.93 17.86 17.58 17.38 17.26 17.01 16.76

India 65.11 68.41 66.99 70.19 72.04 70.52 67.79 68.74 69.62 72.22 73.59 71.83 70.71 70.78 71.24 69.54 69.37 69.82 69.90

Russia 58.31 62.84 62.03 65.64 66.74 65.93 62.81 62.83 66.48 67.60 65.86 66.69 67.66 66.79 65.80 65.20 64.59 64.96 64.25

South Africa 13.31 13.25 12.65 14.09 14.31 14.02 13.33 13.39 14.13 14.75 14.54 14.10 14.31 13.85 13.83 14.38 14.15 14.45 14.81

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

119.6 118.4 116.6 120.4 122.5 121.0 118.9 119.6 120.6 120.9 121.8 123.1 122.8 120.9 120.8 121.1 121.3 122.5 122.6

Sources: Bloomberg, J.P. Morgan, and World Bank. 1 MRV = most recent value.

2019

2018 2019 2018 MRV 1

2017 2018 Q2 Q3 Q4 Q1 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Energy 2 68 87 90 93 84 77 91 92 90 96 97 82 73 74 77 80 84 82 82

Non-energy 2 84 85 89 83 81 82 88 84 83 81 82 81 81 81 83 82 83 81 81

Agriculture 2 87 87 91 85 83 83 89 86 85 83 83 82 83 84 84 83 83 82 82

Metals and minerals 2 79 84 88 80 79 80 88 81 79 79 81 79 77 77 82 83 83 80 74

Memo items:

Crude oil, average ($/bbl) 53 68 71 73 64 60 72 73 71 75 77 62 54 56 61 64 69 67 58

Gold ($/toz) 1258 1269 1307 1213 1229 1304 1282 1238 1202 1198 1215 1221 1250 1292 1320 1301 1286 1284 1284

Baltic Dry Index 1152 1346 1256 1602 1356 793 1352 1649 1710 1447 1545 1201 1322 1068 630 681 777 1032 1085

Sources: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg. 1 MRV = most recent value. 2 Indexes, 2010 = 100. The Index component combination in the Weekly tables differs from that of the Pink Sheet.

2019