1. The External Environment for Developing Countries January 2010 The World Bank Development Economics Prospects Group

2. Momentum of production is moderating toward more sustainable rates industrial production (percent change, saar) Source: World Bank, Development Prospects Group.

3. World trade picks up steam as stimulus measures boost imports Source: World Bank, Development Prospects Group. goods import volumes, OECD and developing countries (ch%, saar)

4. Industrial countries

5. Improvements in labor markets now setting the tone for increased spending change in employment (‘000, 3mma) [L]; income and retail sales x autos, ch% (saar) [R] Source: U.S. Departments of Labor and Commerce. retail x autos [R] change in employment [L]

6. Durable goods orders and factory output momentum fade in late 2009 durable goods orders, mfgr output, ch% (saar) [L]; ISM mfgr headline index (3mma) [R] Source: U.S. Department of Commerce, Institute for Supply Management (ISM).

7. Pick-up in energy and commodity prices lifts CPI to positive territory (y/y) consumer and producer price indices, ch% (saar and 3mma yr/yr) Source: U.S. Department of Labor. CPI saar CPI yr/yr PPI saar

8. Japan spending under pressure from rising unemployment, falling wages unemployment rate (%) [L]; real HH expenditures, cash wages, ch% (y/y) [R] Source: Japan Cabinet Office (EPA). Cash wages [R] Unemployment rate [L]

9. fixed investment, business and residential (homebuilding), ch% saar Japan’s corporate and residential investment (homebuilding) in the doldrums Source: Japan Cabinet Office (EPA).

10. Japan exports up sharply at year end as OECD imports revive Japan machinery orders, export volumes and industrial production, ch% saar Source: Japan EPA through Thomson/Datastream.

11. Euro Area sentiment up in the new year 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]

12. Euro Area unemployment worsens quickly placing damper on spending number of unemployed (millions) [L]; retail sales volume, ch% (3mma, y/y) [R] Source: Eurostat through Thomson/Datastream. Euro Area retail volumes [R] Number of unemployed [L]

13. German exports pick-up at end-year on strong orders for capital equipment German export orders, export volumes and industrial production, ch% saar Source: Bundesbank through Thomson/Datastream.

14. Industrial production

15. Momentum of industrial production is moderating Source: World Bank calculations based on Thomson Datastream data Industrial production (percent change, saar)

16. Chinese output momentum supported by domestic demand and a pick-up in exports Industrial production (percent change, saar) Source: World Bank calculations based on Thomson Datastream data

17. Euro zone production rises on stronger demand for intermediate and capital goods Industrial production (percent change, saar) Source: World Bank calculations based on Thomson Datastream data

18. International trade

19. Global imbalances have begun to stabilize at lower levels USA excluding oil Total goods trade balance, minus all crude oil imports, US$ bn, sa. annualized China excluding oil Source: U.S. Department of Commerce; Haver Analytics.

20. Foreign demand for high-income exports weakens in fourth quarter Export orders, Germany and the United States (ISM) Source: Bundesbank and Institute for Supply Management.

21. Export growth accelerating in developing countries volume of exports, 3m/3m moving average, saar % chg Source: DECPG.

22. Oil prices

23. Oil prices rise above $80/bbl $/ bbl mb/d Oil price [L scale] OPEC Production [R] Source: IEA and DECPG.

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

25. Natural gas and coal prices $/ mmbtu Source: World Gas Intelligence, International Coal Report, and DECPG.

26. Non-oil commodity prices

27. Agriculture prices continue to increase on supply constraints (2000=100) Source: DECPG.

28. Metals prices rise on expectations of stonger demand $/ton Source: LME and DECPG.

29. Gold prices come off their highs $/toz Gold in dollars Gold in euros Source: LME and DECPG.

30. International Finance

31. A surge in bank lending at year end Source: DECPG.

32. EM bond issuance activity off to a strong start in 2010 sovereign bond issuance, monthly, bn USD Source: Dealogic and DECPG staff calculations.

33. EM assets appear fairly strong at the start of 2010 MSCI-EM$ index [L] Source: JPMorgan-Chase and Bloomberg. MSCI-EM in USD [L]; EMBIG bond index [R] EMBIG bond index [R]

34. Currencies

35. Source: Thomson/Datastrea m. yen/U SD USD/Euro (inverse) Dollar recoups 2.5% over 2010 to date on more upbeat growth expectations USD per Euro (inverse) [Left] and Yen per USD [right]

36. Expectations for growth move in U.S. favor Consensus mean GDP growth: forecast for 2010 sampled during 2009/10 Source: Consensus Economics LLC. Forecast Date in 2009/10: Japan Euro Area United States

37. Higher U.S. long rates, apparent let-up in so-called “carry trade” boost dollar MSCI-EM$ index [L] Source: Morgan-Stanley and Thomson/Datastream. MSCI-EM in USD, Jan-2 2009=100 [L]; U.S. yield on 10-year note [R] U.S. 10-year note [R]

38. The External Environment for Developing Countries January 2010 The World Bank Development Economics Prospects Group