1. The External Environment for Developing Countries December 2009 The World Bank Development Economics Prospects Group

2. G-3 exports now growing at double digits… a good omen for world trade U.S. - Japan and Germany export volumes, ch% 3m/3m saar Source: World Bank, DEC Prospects Group.

3. Gross capital flows increase rapidly in the final months of 2009 bond issuance, IPOs and syndicated bank lending, 3mma, billions US dollars Source: World Bank, Development Prospects Group.

4. Industrial countries

5. Source: Department of Commerce. U.S. GDP marked down for third quarter to 2.8% on consumer and exports growth of real GDP, and contributions to growth in percentage points Stocks Government Consumption Investment Net exports

6. Narrowing of job losses in November with new claims down substantially change in employment (‘000, 3mma) [L]; claims for UNR insurance (‘000, 4wma) [R] Source: U.S. Department of Labor. claims for unemployment insurance [R] change in employment [L]

7. Housing makes some progress in pulling out of recession– but risks remain new and existing home sales, (ch% 3mma y/y) [L]; “Affordability index” [R] Source: Department of Commerce and National Association of Realtors. Existing home sales [L] New home sales [L] Affordability index [R]

8. Source: Japan Cabinet Office. Japan’s GDP growth marked down sharply to 1.3% in Q3-09 on invenstment growth of real GDP, and contributions to growth in percentage points Net Exports Stocks Consumption Government Investment

9. Japanese exports increase as demand from the U.S. and Europe comes into play U.S. imports, Japan exports, (nominal USD) Japan IP-mfgr, ch% 3m/3m saar Source: World Bank, DEC Prospects Group.

10. Japan’s deflation has yet to abate prompting BOJ liquidity provisions Tokyo consumer prices [left]; corporate goods prices (PPI) [right], ch% y/y Source: Japan Cabinet Office. consumer prices [L] corporate goods prices [R]

11. Source: Eurostat. Euro Area GDP up 1.5% in Q3-09 (saar) on investment and stocks growth of real GDP, and contributions to growth in percentage points Net Exports Stocks Government Consumption Investment

12. Drivers for European growth continue mixed & uneven GDP growth, third Quarter 2009 (ch%, saar) Source: Eurostat. * contribution to growth.

13. Euro Area sentiment buoyed by emergence from recession IFO survey (overall and expectations) [left]; Euro Area consumer confidence [right] IFO- expectations [L] Source: IFO and European Commission. Euro Area Consumer Confidence [R] IFO- overall [L]

14. Industrial production

15. World output recovering at a brisk pace growth of industrial production, ch% y/y and saar Momentum (3m/3m saar) Year-on-year growth Source: World Bank, DEC Prospects Group.

16. China’s output growth is slowing industrial production growth, ch% y/y and saar Source: World Bank, DEC Prospects Group. Momentum (3m/3m saar) Year-on-year growth

17. Brazil’s IP grounded in domestic demand industrial production growth, ch% y/y and saar Source: World Bank, DEC Prospects Group. Momentum (3m/3m saar) Year-on-year growth

18. International trade

19. Imports strengthened in high income countries over the third quarter import volumes, 3 mma seasonally adjusted percent change Source: World Bank, DEC Prospects Group.

20. U.S. trade deficit narrows on stronger exports and lower oil imports balance of trade (annualized), and deficit minus oil, $ billion Source: U.S. Department of Commerce.

21. Developing countries’ exports return to year-over-year growth in October Export volumes, year-over-year percent change Source: World Bank, DEC Prospects Group.

22. Oil prices

23. Oil prices and OECD oil stocks $/ bbl million bbl Oil price [L scale] OECD stocks [R] Source: IEA and DECPG Commodities Group.

24. World oil consumption growth million barrels per day mb/d

25. WTI Futures Prices - NYMEX DEC 10 $/bbl Monthly contract prices to Dec 2014* for select dates in 2009 Jul 13 Nov 9 * Futures now extend to December 2018 Nov 30

26. Non-oil commodity prices

27. Agriculture prices strengthen on grains and beverages non-oil prices, index 2000=100. (2000=100) Source: Datastream and DECPG Commodities Group.

28. Copper prices and LME stocks $/ton‘000 tons Copper price LME stocks Source: LME and DECPG Commodities Group.

29. Global steel production rebounds mil tons Source: DECPG Commodities Group.

30. International Finance

31. Flows to emerging markets ease to a still-strong $35 billion in November Source: DECPG Finance Team.

32. Terms of borrowing for EM bond issuance have improved average maturity in years [L]; average launch spreads (bps) [R] Source: Bloomberg and DECPG staff calculations. cost of borrowing [right]

33. Robust returns to EM equities in 2009 Source: JPMorgan-Chase and Reuters.

34. Currencies

35. Source: Thomson/Datastrea m. yen/U SD USD/Euro (inverse) Dollar jumps in response to favorable jobs numbers and BOJ’s QE USD per Euro (inverse) [Left] and Yen per USD [right]

36. Recent pickup in net capital flows to U.S. shows distinct flight to quality net flows: U.S. Treasuries, private securities (bn$ 3mma) Source: U.S. Treasury TICs Database and JP Morgan-Chase. Treasuries Private sector securities Total net inflow

37. EM nominal effective exchange rates move toward appreciation NEERs, index Jan-2007 = 100. Source: World Bank, DECPG. Brazil Turkey South Africa Mexico India

38. The External Environment for Developing Countries December 2009 The World Bank Development Economics Prospects Group