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

2. European growth outturns disappoint in fourth quarter Source: National Agencies. growth of real GDP, ch% saar

3. Equity markets and the euro pressured by Greek sovereign debt fragility MSCI-EM$ index Source: Morgan-Stanley and Thomson/Datastream. DAX, Dow Jones Industrials and MSCI-EM indices, Sep-1 09=100. DAX Dow Jones

4. Industrial countries

5. U.S. GDP growth jumps 5.7% in Q4-09 on stocks, investment and exports Source: U.S. Department of Commerce. growth of real GDP, and contributions to growth in percentage points

6. Improvements in labor markets continue to underpin increases in household outlays change in employment (‘000, 3mma) [L]; retail sales x autos, ch% (saar) [R] Source: U.S. Departments of Labor and Commerce. retail x autos [R] change in employment [L]

7. U.S. exports up on increased overseas demand- net-X likely to add to growth export and import volumes, ch% saar Source: U.S. Department of Commerce.

8. Japan’s GDP regains dynamic in Q4-09 on turn in capex to positive growth Source: Japan Cabinet Office, EPA. growth of real GDP, and contributions to growth in percentage points

9. Source: Bank of Japan. Tankan for fourth quarter underlined a likely pick-up in investment business conditions dispersion indices

10. Japan’s orders and exports revive in the last months of 2009 machinery orders, production and export volumes ch% (saar) Source: Japan- METI.

11. Euro-Area growth held to 0.3% in Q4-09 on flat outturns for Germany Source: EuroStat. growth of real GDP, ch% saar

12. European unemployment escalates continuing to dampen household spending Euro Area unemployment rate (%) [L]; retail sales volume, ch% (3mma, y/y) [R] Source: Eurostat. retail sales [R] unemployment rate [L]

13. German factory orders hit hard leading to weaker output growth export orders, manufacturing production, ch% (saar) Source: Bundesbank.

14. Industrial production

15. Eurozone lost growth momentum in the fourth quarter on weak domestic demand industrial production (percent change, saar) Source: World Bank calculations based on Thomson Datastream data.

16. BICS production momentum supported by strong domestic and external demand Source: World Bank calculations based on Thomson Datastream data. industrial production (percent change, saar)

17. European and African emerging markets factory PMI above 50 “growth mark” in January Index sa, 50+ = Expansion Source: JPMorgan-Chase.

18. International trade

19. Imports by the United States and China revive on fiscal stimulus measures value of imports, year-over-year percent change Source: U.S. Department of Commerce; Haver Analytics.

20. Increasing demand for capital- and consumer durable goods underpins exports of manufactures Manufacturing exports in value terms, year-over- year % change Source: Haver Analytics.

21. European exports boost region’s trade surplus to 5 year peak Euro Area exports & imports, ch% saar, and trade balance in billion euros Source: EuroStat.

22. Oil prices

23. Crude oil prices relatively flat in recent months $/bbl WTI Dubai Brent Source: Thomson/Datastream and DEC Prospects Group.

24. OECD total oil stocks days of forward consumption Source: IEA and DECPG.

25. OPEC spare capacity (mb/d) Source: IEA and DECPG.

26. Non-oil commodity prices

27. Agriculture prices buoyed by strong gains in rubber and sugar (Index 2000=100) Source: DECPG.

28. Metals prices fall sharply in early 2010 $/ton Lead Zinc Aluminum Source: LME and DECPG.

29. Metals stocks continue to increase as markets remain in surplus $/ton‘000 tons Copper price LME stocks Source: LME and DECPG.

30. International Finance

31. Bonds underpin January flows Source: DECPG.

32. Sovereign debt default risk has soared notably for several EU countries Source: Bloomberg and DECPG staff calculations.

33. *through February 15 EM equities underperform mature markets over 2010 to date Local currency returns by period

34. Currencies

35. Source: Thomson/Datastrea m. yen/U SD USD/Euro (inverse) Euro down 6.5% vs dollar in the month on Greek sovereign debt plight USD per Euro (inverse) [Left] and Yen per USD [right]

36. Stagnant European growth, equity declines add more pressure to euro downturn MSCI-EM$ index Source: Morgan-Stanley and Thomson/Datastream. DAX, Dow Jones Industrials and MSCI-EM indices, Sep-1 09=100. DAX Dow Jones

37. Euro cross rates vary by trade partner broadly based on economic conditions Source: Thomson/Datastream and World Bank. Negative sign implies decline in local currency vs euro

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