1. The External Environment for Developing Countries March 2008 The World Bank Development Economics Prospects Group

2. Source: Thomson/Datastream. Large-scale losses across global bourses in the last weeks index January 1, 2008 = 100 DAX TOPIX Dow Jones MSCI

3. Source: Thomson/Datastream. yen/USD   USD/Euro (inverse) Dollar plummets to all-time lows against the majors USD per Euro (inverse) [Left] and Yen per USD [right]

4. Industrial countries

5. Fed funds target rate [L] Source: Thomson/Datastream. A dramatic 75bp cut in Fed Funds on Mar-18 carries the rate to 2.25% DJIA [R] Fed funds rate [left] DJIA [right]

6. Employment declines feed into softening retail sales in February sales volume, ch% 3mmay/y [left]; delta employment, 3mma [right] Retail sales volume [L] Change in Employment [R] Source: Departments of Commerce and Labor.

7. U.S. inflation picks up on higher energy and food- a possible restraint on the Fed headline CPI ad PPI, ch% 3mma y/y Headline CPI Headline PPI Source: U.S. Department of Labor.

8. Source: Cabinet Office and DECPG calculations. Revised Japan GDP bumps Q4-growth to 3.5% from 3.7% on investment growth of real GDP, and contributions to growth in percentage points Net exports Stocks Fixed Investment Government Consumption Growth 2007 2.0%

9. Source: Thomson/Datastream. Yen strength and plummeting equities hit consumer confidence hard Yen per dollar [right] and TOPIX index January 1, 2007 = 100 TOPIX [L] Yen [R]

10. Japan’s GDP boost from net exports may fade over 2008 goods export and import volumes, ch% saar Source: Cabinet Office-- Thomson/Datastream. Export volumes Import volumes

11. Source: Eurostat and DECPG calculations. Euro-Zone GDP slows to 1.5% growth in fourth quarter on sluggish demand growth of real GDP, and contributions to growth in percentage points Net exports Fixed investment Consumption Government Change in stocks Growth 2007 2.6%

12. German factory orders drop in January foreign orders halve in momentum factory orders, total, domestic, overseas, ch% saar Source: Bundesbank-- Thomson/Datastream. Total orders Foreign orders Domestic orders

13. ECB: policy rates will not be cut as growth slows and HICP rises HICP inflation (ch% y/y) [L]; EA IP ch% saar [R] Source: Eurostat and Bundesbank. Euro Area IP (mfg) [R] HICP inflation (y/y) [L]

14. Industrial production

15. Sharp downtrend expected for Euro Area industrial output growth 6mn/6mn ar dataforecast Source: DECPG

16. Robust external demand cushioned U.S. IP from weak domestic demand 6mn/6mn ar Industrial production Export volumes Source: DECPG dataforecast

17. IP trend growth in Japan is also projected to deteriorate 6mn/6mn ar Source: DECPG dataforecast

18. High-tech Markets

19. Source: National Agencies and DECPG calculations. High-tech orders slumping in the U.S. and Europe G-3 orders for high-tech manufactures, US dollar terms, ch% saar G-3 High-tech orders [L] United States [R] Europe [R]

20. Semiconductor sales and tech output wane over late 2007 and early 2008 semi-chip sales ch% y/y [L]; output of high-tech goods ch% saar [R] Source: SIA, Thomson/Datastream, Haver. Production [R] Semiconductor sales

21. Exports mixed across the globe global exports of high-tech goods in USD terms, ch% 3mma y/y World East Asia x Japan Source: National Agencies and DECPG calculations. USA

22. International trade

23. U.S. export growth easing into the first months of 2008 goods exports: values and volumes, percent change 3mma/y/y and saar Source: Department of Commerce-- Thomson/Datastream. Value year/year Volume year/year Value saar Volume saar

24. World and high-income exports to slow but revive somewhat at mid-2008 goods export volumes, ch% saar Source: National Agencies through Thomson/Datastream. High-income exports World exports

25. Exports from China and other developing economies up in January goods export volumes, ch% saar Source: National Agencies through Thomson/Datastream. Developing ex China China exports

26. Oil prices

27. Gold and Oil at all-time highs Gold $/tozOil $/bbl Oil Gold Source: LME and DECPG Commodities Group.

28. Crude oil inventories rise seasonally exacerbated by weak demand M bbl Source: U.S. Department of Energy and DECPG Commodities Group. 5-year high-low ranges

29. WTI Futures Prices - NYMEX Mar 13 2008 $/bbl Monthly contract prices to Dec 2013* on select dates in 2007-08 * No monthly futures prices for 2013 for contracts trading before Nov 07 Jan 16 2007 Aug 15 2007 Feb 6 2008

30. Non-oil commodity prices

31. Food and beverage prices surge (1990=100) Source: DECPG Commodities Group.

32. Copper prices rebound on falling stocks and tight supplies $/ton‘000 tons Copper price LME stocks Source: LME and DECPG Commodities Group.

33. World Refined Metal Consumption* ‘000 tons * Aluminum, Copper, Lead, Nickel, Tin, Zinc

34. International Finance

35. Continued stagnation in flows to emerging markets in February Source: DECPG Finance Team.

36. Source: Thomson/Datastream. Continued turmoil in world stock markets Equity price indexes, January 1, 2007 = 100 Eurofirst-300 Nikkei-225 S&P-500 MSCI

37. Source: JPMorgan- Chase. Credit risk soars to record levels Credit default swap spreads (CDSs), basis points CDSs on the Europe index CDSs on the North American indexCDSs on Emerging Market Index

38. Currencies

39. Source: Thomson/Datastream. yen/USD   USD/Euro (inverse) Dollar plummets to all-time lows against the majors USD per Euro (inverse) [Left] and Yen per USD [right]

40. Interest differentials now at 230 bp favoring euro-based assets US-LIBOR, EURIBOR in percent USLIBOR Source: Thomson/Datastrea m. EURIBOR

41. Source: Thomson/Datastream. Dollar falling equally sharply against emerging market units index, LCU per USD, January 1, 2007 = 100 Russian ruble Turkish lira euro Brazilian rei

42. Focus March 2008 Food prices and domestic inflation

43. International food prices increased 25% in real terms since Jan-2006 Index, 2006=100 Source: DECPG Nominal LCU Nominal US$ Real

44. Similar increases in domestic food prices across countries percentage change since Jan-2006 imported food price Domestic food price Source: DECPG

45. Food prices exert upward pressures on inflation percentage points Food Non-Food Source: DECPG

46. The External Environment for Developing Countries March 2008 The World Bank Development Economics Prospects Group