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

2. Source : Thomson - Datastream Equity and commodity markets echo the pickup in global economic activity Dow - Jones Industrial average [ left ]; Copper price ($/ ton ) [ right ] Copper price [ right ] Dow Jones [ left ]

3. Greek CDS spread drops sharply in the wake of Euro - Group / IMF financial package Source : Bloomberg.

4. OECD developments

5. ISM surveys show step - up in U. S. services Source : Institute for Supply Management ( ISM ). headline activity indexes, mfgr and services

6. U. S. business investment and employment turn the corner to growth bus. investment, ch % ( q / q ) saar [ left ]; change in employment ‘000 [ right ] Source : U. S. Departments of Commerce and Labor.

7. Source : U. S. Department of Commerce and National Association of Realtors. U. S. housing hit by a wave of foreclosures Home sales, ch % 3 mma y / y

8. Japanese prices still falling despite pickup in economic activity consumer and producer prices, GDP deflator and Industrial Production ch % ( y / y ) Source : Japan Cabinet Office, METI.

9. Greek CDS spread drops sharply in the wake of Euro - Group / IMF financial package Source : Bloomberg.

10. European sentiment steps up…with little evidence for growth Source : IFO, Bank du France and Bundesbank. IFO ( overall ), Bank du France ( business climate ) [ left ]; German export volumes, ch % saar [ right ]

11. Country Focus: China

12. China ’ s growth remains robust in 2010 Source : World Bank Real growth ( percent )

13. Net external trade subtracted heavily from growth in 2009 Source : World Bank Contribution to growth ( real, percent y - o - y )

14. China ’ s exports have recovered impressively Source : World Bank Index, constant prices ( October 2008 = 100)

15. The composition of growth is likely to change substantially this year Source : World Bank Contribution to growth ( real, percent y - o - y )

16. The external surplus is likely past its peak Source : World Bank Share of GDP ( percent )

17. China ’ s cyclical condition differs sharply from that in the United States Source : World Bank Percent

18. Industrial production

19. Global industrial production continues to expand at a rate near 10% Source : World Bank calculations based on Thomson Datastream data global industrial production, ch % (3 m /3 m, saar )

20. Pace of recovey in production mixed across developing regions industrial production, ch % (3 m /3 m saar ) Source : World Bank data

21. Growth in retail sales picking up but volumes yet to breach pre - crisis levels Source : DEC Prospects Group calculations global retail sales proxy, ( excl United States ), ch % ( y / y )

22. International trade

23. Developing country trade increased above pre - crisis peaks as of early 2010 Source : World Bank, DEC Prospects Group export and import volumes, billions USD

24. China ’ s share in U. S. trade deficit in part a reflection of East Asia ’ s production chain Source : U. S. ITC data and World Bank calculations share of selected countries in U. S. trade deficit

25. LPI 2010 – performance varies around the world Source : Connecting to Compete, World Bank, 2010 No data Logistics friendly Logistics unfriendly Partial performers Consistent performers

26. Oil prices

27. Oil prices and OPEC production $/ bbl million b / d Oil price [ L scale ] OPEC production [ R scale ] Source : IEA, Bloomberg and DECPG.

28. U. S. petroleum inventories remain relatively high million barrels 5- year range U. S. petroleum inventories Source : U. S. EIA.

29. U. S. natural gas prices remain low on unconventional production gains $/ mmbtu Oil price U. S. gas price Source : IEA, Bloomberg and DECPG.

30. Non-oil commodity prices

31. Food - beverage prices fall but cotton & rubber prices up on supply constraints (2000=100) Source : DECPG.

32. Metals prices rise on demand expectations $/ ton Copper [ L scale ] Nickel [ R scale ] Source : IEA, Bloomberg and DECPG. Aluminum [ L scale ]

33. Global steel production (000 tons ) Source : IISI.

34. International Finance

35. Capital flows to EM surged in March Source : DECPG. $ billion 2008 20092010 Q1Q1 Total Q1Q1 JanFebMarQ1Q1 Total 103390 4835333174494 Bonds 1265 18115215 48 Banks 71257 22129451019 Equity 2068 8109771327 Lat. America 1990 21137941629 Bonds 520 1062821019 E. Europe 36157 672122924 Bonds 235 43371817 Asia 3898 181221271433 Bonds 37 5167209 Others 1145 3220358

36. Source : JPMorgan, Bloomberg, World Bank. Volatility of risky assets continues to ease in 2010 VIX index [ left ], daily change in weighted EMBIG spreads (30- day movavg )[ right ] EM bond volatility, EMBIG [ R ] Equity volatility, VIX index [ L ]

37. Source : Bloomberg and World Bank. U. S. Treasury yields increasing…European and EM bonds remain subdued 10- year government bonds yields (%)

38. Currencies and inflation

39. Source : Thomson / Datastream. yen / USD USD / Euro ( inverse ) Euro regains some ground vs dollar on partial relaxation of Greek debt tensions USD per Euro ( inverse ) [ Left ] and Yen per USD [ right ]

40. Source : Thomson - Datastream Volatility in USD - Libor increases sharply with UST yields moving well above Bund USD - Libor, EURIBOR, US Treasuty 10- year yield and 10- yr Bund yield, percent EURIBOR USD - LIBOR UST -10- yr Bund 10- yr

41. Inflation picking up as the period of high commodity prices passes from calculation Source : World Bank, DEC Prospects Group headline CPI indexes, ch % yr / yr

42. Focus Financing gaps in 2010

43. External financing needs decline in 2010-11 $ trillion Source : DataStream and World Bank, DEC Prospects Group Maturing foreign debt [ left ] Current account deficit [ left ] % of GDP of those countries with financing needs [ right ]

44. Modest recovery in private capital expected in 2010 and 2011 Net private capital flows to developing countries, $ billion Source : DataStream and World Bank, DEC Prospects Group

45. External financing gaps are projected to fall Source : World Bank DEC Prospects Group staff estimates 200920102011 Total gap ($ bn ): 352 210 180

46. Financing gaps were closed through current account adjustment and higher - than expected capital flows Source : World Bank, DEC Prospects Group billions dollars

47. 20052006200720082009 World Bank 2.7-0.54.87.121.1 IMF -40.2-26.7-5.110.827.5 Other official -34.0-45.1-0.610.220.9 Total -71.5-72.3-0.928.169.5 Source : World Bank Debtor Reporting System, IMF Net official flows increased sharply in response to the crisis billions dollars

48. Sovereign debt issuance by high - income countries, 2006-2010 Source : IMF and World Bank trillions dollars

49. The External Environment for Developing Countries April 2010 The World Bank Development Economics Prospects Group

50. EE - 26 EE - 24 ESTR. ED. – 40 & Para line spacing = mult, 0.8 EE - 26