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

2. Liquidity in global inter-bank markets have virtually returned to normal conditions G-7 meeting Pre-crisis USD average Source: Thomson/Datastrea m. Dollar Euro The acute phase of the financial crisis has passed LIBOR-OIS spreads, basis points

3. The decline in industrial production has turned around industrial production, ch% (saar) OECD Developing World Source: National Agencies through Thomson /Datastream.

4. Industrial countries

5. U.S. consumer spending will come to support GDP outturns for third quarter real PCE and retail sales growth (saar) [L]; change in employment (‘000, 3mma) [R] Source: U.S. Departments of Commerce and Labor. Real PCE [L] Change in employment [R] Retail volumes [L]

6. Sectoral developments have been upbeat ISM headline Mfgr and Svcs indices [L]; capital goods orders, ch% (saar) [R] Source: Institute for Supply Management, Department of Commerce. Capital goods orders [R] ISM Manufacturing ISM Services

7. U.S. trade developments should offer modest boost to GDP as well goods export and import volumes, ch% saar Source: U.S. Department of Commerce. Export volumes Import volumes

8. Japan’s orders, exports and production take a huge leg up over June and July core machinery orders, export volumes and mfgr output, ch% saar Source: Bank of Japan and Japan Cabinet Office. Production Core machinery orders Goods export volumes

9. Source: Bank of Japan and DECPG calculations. Japan’s exports receive a boost from improved demand in Asia and United States contributions to growth of Japanese export volumes (yr/yr)

10. Japanese consumer spending retrenches as labor markets deteriorate quickly unemployment rate (%) [L]; household spending and retail sales, ch% (y/y) [R] Source: Japan Cabinet Office. Retail sales [R] Unemployment rate % [L] Household expenditure [R]

11. Euro Area GDP outturns improved broadly in second quarter GDP growth Q1-2009 and Q2-2009, ch% (q/q saar) Source: European Commission and Eurostat.

12. German and French exports breach into positive territory, underpinning production goods export volumes ch% (saar) Germany Source: Eurostat. France

13. Household spending remains weak as spillovers from trade await consumer spending volumes, ch% (yr–on-yr) Source: EUROSTAT. Italy France Germany

14. Industrial production

15. The pace of decline in industrial production has turned around industrial production, ch% (saar) OECD Developing World Source: National Agencies through Thomson /Datastream.

16. East Asia in the fore, with a general uptrend across all regions Developing Industrial production, percentage change (saar) Latin America Europe & Central Asia South Asia Middle-East & North Africa East Asia & Pacific Source: National Agencies through Thomson /Datastream. industrial production, ch% (saar)

17. Growth recovery fastest among countries that had steepest declines– levels depressed Source: World Bank, DEC Prospects Group Oil producing countries Other MIC's and HIC's (incl LAC Resource exporters, US, UK) Countries with large imbalances and/or affected via trade channels Capital goods exporters industrial production

18. International trade

19. Source: National Agencies through Haver Analytics. Imports [L] Exports [L] Balance of trade [R]

20. Source: Netherlands Central Plan Bureau (CPB).

21. Source: Department of Commerce. U.S. current balance improves further in second quarter to 2.8% of GDP billions U.S. dollars Income Services Non-oil BOT Oil balance Transfers Current account

22. Oil prices

23. Oil prices supported by improving fundamentals $/ bbl mb/d Oil price [L scale] OPEC-11 Production [R] Source: IEA and DECPG Commodities Group.

24. U.S. crude oil inventories decline but remain high M bbl Source: U.S. Department of Energy and DECPG Commodities Group. 5-year high-low ranges

25. WTI Futures Prices - NYMEX Sep 11 $/bbl Monthly contract prices to Dec 2014* for select dates in 2009 Feb 18 Jul 13 Jun 11 Source: NYMEX.

26. Non-oil commodity prices

27. Agriculture prices higher on sharp gains in sugar, rubber and fats & oils (2000=100) Source: DECPG Commodities Group.

28. Metals prices increase on supply constraints $/ton Lead Copper Nickel Source: LME and DECPG Commodities Group.

29. Gold prices rise on concerns about the dollar, inflation and the economy per toz Gold in USD Gold in euros Source: LME and DECPG Commodities Group.

30. International Finance

31. Flows slowed in August in the wake of a surge in July bond issuance Source: DECPG Finance Team. Gross capital flows to emerging markets $ billion 2007 20082009 Total H1TotalJan-Aug H1JunJulyAugYTD Total 652 258389315 112233811159 Bonds 146 536560 38318357 Banks 312 151257192 4087452 Equity 194 546862 331213451 Lat. America156 619075 36812149 Bonds 45 172018 1526122 E. Europe 247 99157124 22513339 Bonds 64 273533 13110124 Asia 188 699881 461011661 Bonds 23 777 80118 Others 61 284435 711110

32. Source: JPMorgan-Chase. Sovereign spread EMBI Corporate spread CEMBI Emerging Market bond spreads continue to narrow basis points

33. Source: Bloomberg. Developed markets Emerging markets Global equities continue uptrend MSCI indexes, Jan-2008 = 100.

34. Currencies

35. Source: Thomson/Datastrea m. yen/U SD USD/Euro (inverse) Dollar depreciation accelerates over August and September USD per Euro (inverse) [Left] and Yen per USD [right]

36. Source: Thomson/Datastrea m. US LIBOR - EURIBOR Euromarket interest differentials move against the greenback difference: USD 6-month LIBOR and EURIBOR 6-months (basis points)

37. Emerging market currencies continue gains against U.S. dollar percentage change (USD per LCU) (%) Source: Thomson/Datastrea m. Second quarter 2009 Third quarter 2009 Stronger Local Currency

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