Global Monthly January 2019 Overview Table of Contents  According to the January 2019 Global Economic Prospects Monthly Highlights ............................................ 2 report, global growth is expected to moderate to 2.9 percent Special Focus...................................................... 6 this year, as global trade and manufacturing activity lose steam and borrowing conditions tighten further. Recent Prospects Group Publications ................... 8 Recent World Bank Working Papers .................... 8  In this context, EMDE growth is expected to stall, at 4.2 percent in 2019, reflecting a faster-than-expected Recent World Bank Reports ................................ 8 deceleration in major commodity importers and weaker- Table A: Major Data Releases ............................. 8 than-expected recovery in many exporters. Table B: Activity and Inflation ........................... 9  Downside risks have become more acute, as financial stress Table C: Trade and Finance............................... 9 episodes could become more frequent and trade tensions could escalate. Global risks could be compounded by Table D: Financial Markets ............................ 10 country-specific risks and vulnerabilities across EMDEs. Table E: Commodity Prices............................... 10 Share of countries with slower growth or forecast Chart of the Month downgrades in 2019  Close to 70 percent of advanced economies are expected to register weaker growth in 2019, as economic slack dissipates and policy accommodation is removed.  While activity is projected to decelerate in only one-third of EMDEs this year, growth projections were downgraded in more than 40 percent of them.  Downgrades were especially pronounced in countries most affected by currency and capital outflow pressures during 2018. Slowing external demand and rising policy uncertainty were also determining factors of forecast Source: World Bank. Note: Decreasing growth are changes of at least 0.1 percentage point from the downgrades for some countries. previous year. Countries with a slower pace of contraction from one year to the next are included in the increasing growth category. Downgrades reflect forecasts that were downgraded between June 2018 and January 2019. Special Focus: Debt in Low-Income Countries  Since 2013, median government debt in low-income countries has risen by 20 percentage points of GDP and increasingly comes from non-concessional and private sources.  Rising public debt leaves some LICs vulnerable to currency, interest rate, and refinancing risks. Eleven LICs are currently in debt distress or at a high risk of debt distress, compared to only six in 2015. The Global Monthly is a publication of the Prospects Group. This edition was prepared by Marc Stocker and Collette Wheeler, based on contributions from Eung Ju Kim, Patrick Kirby, Peter Nagle, Yoki Okawa, Julia Roseman, Rudi Steinbach, Temel Taskin, Ekaterine Vashakmadze, Dana Vorisek, and Sandy Ye. This Global Monthly reflects data available up to January 23. For more information, visit: www.worldbank.org/en/research/brief/economic-monitoring.    January 2019 Monthly Highlights FIGURE 1.A Share of countries with slower Global growth: moderating. Global growth slowed to a near growth three-year low of 2.4 percent (q/q saar) in 18Q3, and survey data suggest that the subdued momentum persisted in 18Q4, with the global manufacturing PMI ending the year at a 27-month low. Growth also became more uneven in 2018, with activity decelerating in close to 80 percent of advanced economies and nearly half of EMDEs (Figure 1A). Global inflation, which trended up during most of 2018, is likely to be temporarily dampened by sharp drops in oil prices observed since October. According to the January 2019 Global Economic Prospects, global growth is projected to moderate to 2.9 percent in 2019, down from an estimated 3 percent in 2018, as global investment and trade soften (Figure 1B). Growth is anticipated to slow this year in two-thirds of advanced economies and about one-third of FIGURE 1.B Global growth EMDEs—including the United States, the Euro Area, and China, the world’s three largest economies. Global trade: continued uncertainty. After reaching a six-year high of 5.4 percent in 2017, global trade growth slowed to an estimated 3.8 percent in 2018—the sharpest deceleration since 2012 (Figure 1C). Incoming data are mixed, with goods trade volumes and container shipments recovering in October, but export orders falling to a two-and-a-half year low in December. Trade tensions between the United States and China continued to weigh on confidence. New tariffs introduced in 2018 affected about 12 percent of U.S. goods imports, 6.5 percent of China’s goods imports, and 2.5 percent of global goods trade. Global trade growth is predicted to slow to 3.6 percent in 2019, as investment FIGURE 1.C Global trade growth, volumes in major economies loses steam. Global financing conditions: more volatile. Borrowing costs in advanced economies crept up during most of 2018, as U.S. policy interest rates rose by 100 basis points and the ECB ended its asset purchase program. U.S. long-term yields stabilized at 2.7 percent in January, up around 30 basis points from a year earlier, but down from a seven-year peak of 3.2 percent in November (Figure 2A). The recent decline reflects mounting worries about the growth outlook and expectations that the Federal Reserve is approaching the end of its tightening cycle. Global equity prices have experienced marked losses since October and were down about 10 percent for 2018 as a whole, dampened by concerns about global prospects amid heightened trade tensions and lower- Source: World Bank A. Decreasing growth are changes of at least 0.1 percentage point from the than-expected earnings. previous year. Countries with a slower pace of contraction from one year to the next are included in the increasing growth category. B.C. Shaded area indicates forecasts. Aggregate growth rates calculated using EMDE financing conditions: tightening. Several EMDEs were constant 2010 U.S. dollar GDP weights. C. Trade measured as the average of export and import volumes. under financial pressure during 2018, fueled by a combination of 2   January 2019 U.S. dollar strength, higher borrowing costs, and concerns about softening growth. Since April 2018, cumulated outflows from FIGURE 2.A U.S. sovereign bond yields emerging market bond and equity funds have surpassed those following the 2013 Taper Tantrum. International bond issuances, syndicated bank loans, and equity issuances ended the year on a subdued note. Overall, yields on EMDE debt issued on international bond markets rose by about 150 basis points in 2018—the third largest annual increase in the last two decades (Figure 2B). Various EMDE central banks responded to currency and capital outflow pressures with interest rate hikes, leading to tighter domestic borrowing conditions and, in some cases, slower credit and domestic demand growth. In January, equity prices recovered some of their December losses, while bond spreads narrowed slightly. Commodity markets: more volatile. Oil prices fell sharply in FIGURE 2.B Largest annual changes in EMDE 18Q4, after the United States announced temporary waivers to bond yields since 2000 sanctions on Iran’s oil exports to eight countries, including China and India. Rising production in Saudi Arabia, Russia, and the United States, and weakening prospects for global oil demand also contributed to downward pressures. Oil prices are forecast to average $67/bbl in 2019, slightly lower than 2018 but higher than current prices, on expectations of a lift from planned production cuts of 1.2 million barrels per day by OPEC and its partners, including Russia (Figure 2C). Prices rallied in early 2019 on news that OPEC had cut production by nearly 0.5mb/d in December, with Brent crude oil rising from a two-year low of $50/bbl in December to $62/bbl towards the end of January. Metals and most agricultural prices fell in the second half of 2018 following the imposition of new U.S. tariffs on imports from China. FIGURE 2.C Commodity price forecasts, nominal Industrial metals prices were particularly responsive to trade tensions, with some falling more than 20 percent. United States: slowing growth. U.S. growth picked up in 2018, to an estimated 2.9 percent, bolstered by fiscal stimulus measures. Labor market conditions remained robust throughout the year, with nominal wage growth accelerating to reach its highest pace since 2009. However, incoming data suggest slower growth, with the manufacturing PMI in December and consumer confidence in January dropping to their lowest levels since October 2016. The government shutdown that has continued into January and is now the longest on record, could further weaken activity in the short term. U.S. growth is projected to slow to 2.5 percent in 2019, reflecting tighter financing conditions and waning fiscal support Source: Bloomberg, J.P. Morgan, World Bank. A. Sovereign yields reflect the yield on U.S. Treasury bonds. Last observation is (Figure 3A). The Federal Reserve raised policy interest rates in January 22, 2018. B. EMDE bond yields are calculated as the sum of the J.P. Morgan Emerging December, to a target range of 2.25–2.5 percent, and the median Market Bond Index (EMBI) spread and the 10-year U.S. Treasury yield. C. Nominal price indexes. Shaded area indicates forecast. forecast of Federal Open Market Committee members points to two additional hikes in 2019. 3     January 2019 Euro Area: weakening momentum. Euro Area growth slowed FIGURE 3.A Stance of U.S. fiscal and monetary notably in 2018, to an estimated 1.9 percent, amid weakening policy external demand. In December, the composite PMI fell to its lowest level in over five years. As monetary stimulus is gradually withdrawn and global trade growth moderates, Euro Area growth is projected to slow to 1.6 percent in 2019. The ECB has stopped its asset purchase program but has signaled that it will maintain its negative interest rate policy until at least mid-2019. United Kingdom: high uncertainty. Uncertainty remains elevated in the United Kingdom as it is set to transition out of the European Union. The draft withdrawal treaty negotiated with European authorities was rejected in Parliament on January 15, and no alternative proposals have been made so far, despite ongoing negotiations. A no-deal Brexit could disrupt activity in the short term and might exacerbate financial stability risks in the FIGURE 3.B Bond spreads and equity prices in China United Kingdom and abroad. Japan: volatile activity. Growth in Japan slowed to an estimated 0.8 percent in 2018, partly reflecting the dampening effect of natural disasters. However, the labor market remained robust, and the Bank of Japan continues to provide exceptional stimulus by keeping long-term rates near zero and adding to its balance sheet. Growth is projected at 0.9 percent in 2019, as a recovery from last year’s temporary disruptions is partly offset by prospects of weakening external demand. China: calibrated policy measures. Growth slowed to 6.6 percent in 2018, as industrial production and exports decelerated, while consumption growth remained robust. Incoming data confirm FIGURE 3.C Growth in major EMDE commodity softening momentum, with growth in 18Q4 dropping to 6.1 importers percent (q/q saar), and exports and imports falling sharply towards the end of the year. Stock prices, bond spreads, and the renminbi were under pressure for most of 2018 but stabilized in January, reflecting additional policy support, and a renewed commitment to accelerated structural reforms (Figure 3B). Growth is projected to moderate to 6.2 percent in 2019, with fiscal and monetary policy accommodation expected to offset the negative impact of higher U.S. trade tariffs on exports. Other commodity-importing EMDEs: mixed. Growth moderated in about 40 percent of commodity importers in 2018, with notable declines in countries facing currency and financial market pressures. In 2019, around 50 percent are projected to Source: Bureau of Economic Analysis; Federal Reserve Bank of St. Louis; decelerate—the highest proportion since 2012. The slowdown in Haver Analytics; Holston, Laubach, and Williams (2016); J.P. Morgan; World Bank. Turkey is especially severe, from an estimated 3.5 percent in 2018 A. Forecasts are market expectations. The neutral rate is the nominal short- term interest rate when the economy operates at its full potential once transitory to a projected 1.6 percent in 2019 (Figure 3C). Activity has also shocks have abated. Shaded area indicates forecasts. B. Bond spread measures the average spread of China’s sovereign debt over weakened in a number of other commodity importers that its equivalent maturity U.S. Treasury bond. Equity index is the Shanghai Stock Exchange (SSE) Composite. Last observation is January 22, 2018. experienced financial pressures or continue to face large fiscal and C. Shaded areas indicate forecasts. 4   January 2019 current account deficits (e.g., the Philippines, Romania). In FIGURE 4.A Growth in major EMDE commodity Mexico, growth is projected to edge down in 2019, to 2 percent, exporters  on policy uncertainty and still subdued investment. In Poland, growth is expected to moderate, but to a still robust 4 percent in 2019. In India, growth picked up to an estimated 7.3 percent in FY2018/19 and is expected to increase further to 7.5 percent in FY2019/20 as domestic demand continues to strengthen. Commodity-exporting EMDEs: stalled recovery. The recovery in many commodity exporters stagnated in 2018, reflecting decelerating external demand, tighter borrowing conditions, volatile commodity prices, and various domestic headwinds. While growth is still foreseen to accelerate in more than 60 percent of commodity exporters in 2019, it will remain, on average, less than half the pace of commodity importers. Activity in Argentina FIGURE 4.B Impact on global growth of 1- shrank by an estimated 2.8 percent in 2018, following acute percentage-point growth slowdowns in the financial market stress, and is expected to continue contracting in United States and China   2019, by 1.7 percent (Figure 4A). In South Africa, growth weakened to an estimated 0.9 percent in 2018 amid slow mining activity, low business confidence, and policy uncertainty. It is expected to recover to a still subdued 1.3 percent in 2019, as fiscal consolidation continues and domestic demand remains weak. Growth in Brazil was also lackluster in 2018, at an estimated 1.2 percent, reflecting in part a truckers’ strike mid-year and heightened policy uncertainty. As these factors unwind, growth is predicted to pick up to 2.2 percent in 2019. In Russia, growth was resilient in 2018, at an estimated 1.6 percent, but is expected to moderate slightly to 1.5 percent in 2019, reflecting recent oil price declines and renewed pressures on currency and asset prices. FIGURE 4.C Global policy uncertainty, Risks: increasingly on the downside. The balance of risks has geopolitical risk, and volatility, 2018 tilted further down. The possibility of disorderly financial market developments has increased and could spread through EMDEs, amplified by elevated debt levels in many countries. Escalating trade tensions could be disruptive in the presence of complex value chains. Although unlikely in the near term, the simultaneous occurrence of a severe U.S. downturn and a sharper-than-expected deceleration in China could trigger a deeper slowdown in global activity (Figure 4B). Policy uncertainty and geopolitical risks remain high and could negatively impact confidence and investment in both the affected countries and globally (Figure 4C). In the absence of an approved withdrawal agreement, the exit of the United Kingdom from the EU could be accompanied by Source: Baker, Bloom, and Davis (2016); Bloomberg; Caldara and Iacoviello significant disruptions to domestic activity and become a source of (2017); World Bank. A. Shaded areas indicate forecasts. financial stability risk in other economies. B. Blue and red bars show scenarios assuming a 1-percentage-point growth shock in China, the United States, and the combination of the two. Refer to the January 2019 edition of Global Economic Prospects for details. C. The policy uncertainty index is computed by Baker, Bloom, and Davis (2016) and is based on the frequency of words in domestic newspapers mentioning economic policy uncertainty. Last observation is December 2018. 5     January 2019 Special Focus: Debt in Low-Income FIGURE 5.A Gross government debt in LICs Countries Debt vulnerabilities in low-income countries (LICs) are rising, as borrowing has surged and the composition of debt has shifted toward more expensive and less transparent sources of financing. LIC debt: Recent sharp rise. Debt relief under the Heavily In- debted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI) helped reduce public debt among LICs from a median debt-to-GDP ratio of nearly 100 percent in the early 2000s to just over 30 percent in 2013. This downward trend reversed sharply thereafter, with the median debt ratio ris- ing to above 50 percent by 2017 (Figure 5A). The sharpest accel- eration was observed in commodity-exporting LICs (Figure 5.B). FIGURE 5.B Gross government debt by LIC Uses of debt: Some investment, mostly consumption. Fiscal sus- category tainability concerns over rising debt levels can be mitigated if public debt finances growth-enhancing investment that raises potential output and thus the ability to repay loans in the future. In some LICs, wider fiscal deficits were matched by higher public investment. For most LICs, however, a substantial part of bor- rowing has been used to finance a rise in current consumption. Composition of debt: shift to non-concessional. The composi- tion of debt has become increasingly non-concessional as LICs have increased their reliance on financing from non-traditional sources (Figure 5C). The median share of the non-concessional component in public debt rose to 55 percent in 2016 (the latest year for which data are available), an increase of nearly 8 percent- FIGURE 5.C Change in creditor composition of public and publicly-guaranteed external debt, age points from 2013 and 15 percentage points compared with a 2007-2016 decade earlier (Figure 6A). New sources of debt: non-Paris Club and commercial creditors. Non-Paris Club creditors have become a more important source of financing over the past decade, especially in Sub-Saharan Afri- ca. In 2016, non-Paris Club debt accounted for more than one- fifth of external debt in the median LIC, and about 13 percent of their public debt. Major recipients of lending from non-Paris Club creditors include the Democratic Republic of Congo, Ethi- opia, Mozambique, Tanzania, Uganda, and Zimbabwe. Com- mercial creditors have also become an important source of credit for some countries. Ethiopia, Mozambique, Rwanda, Senegal, Source: International Monetary Fund, World Bank. Note: LICs = low-income countries. Tajikistan, and Tanzania have all issued commercial public debt A. Dashed blue lines denote the interquartile range, while the solid blue line is the median. since 2010, generally denominated in U.S. dollars. A.B. The sample includes 30 low-income countries. C. GDP-weighted average across 32 low-income countries. Refer to the January 2019 edition of Global Economic Prospects for details. Lending standards: less transparency. Lending arrangements for 6   January 2019 non-Paris Club and commercial debt often are not publicly dis- FIGURE 6.A Share of non-concessional debt in closed, and can be complex. Some of this debt is collateralized, LICs which could reduce budget flexibility by earmarking revenues, weaken the creditor’s incentive to assess the borrower’s debt sus- tainability, and (if large) increase funding costs from other credi- tors who may reassess the probability of being repaid. Moreover, increased exposure to non-Paris Club and commercial creditors may pose coordination challenges for debt resolutions. Risk of debt distress. Higher levels of public debt, much of it ex- ternal, and an increased reliance on commercial loans expose many LICs to currency, interest rate, and refinancing risks. As advanced economies continue to withdraw exceptional monetary policy accommodation and external financing conditions tighten, new debt issuances and rollovers may become more expensive, FIGURE 6.B Share of LICs in debt distress or at high risk of distress resulting in rising debt service costs that could weaken investment and lower medium-term growth prospects in LICs. Because of rising arrears or the need for debt restructuring, 11 LICs were assessed as being in debt distress or at a high risk of debt distress as of November 2018, compared to only six in 2015 (Figure 6B). For LICs assessed at low or moderate risk of debt distress, safety margins have eroded. High debt levels add to existing vulnerabilities. Risks to LIC growth are tilted to the downside and include the possibility of a faster-than-expected slowdown among major trading partners; lower commodity prices; a deterioration in international financial conditions; and the possibility of natural disasters, conflict, or FIGURE 6.C Foreign direct investment severe weather events. In addition, almost all LICs carry persis- tent, substantial current account deficits. Moreover, FDI flows to some LICs (notably metals exporters) are particularly sensitive to fluctuations in global conditions (Figure 6C). Policy priorities: Domestic resource mobilization, debt and in- vestment management. Despite some improvement, debt man- agement capacity in many LICs is low—recent examples of hid- den debt and discrepancies in debt statistics point to continued low debt recording capacity, weak legal frameworks, and govern- ance challenges. LICs need to increase the effectiveness of domes- tic resource mobilization, public investment and other spending, and improve debt management practices, with a focus on better Source: International Monetary Fund, World Bank. A. Dashed blue lines denote the interquartile range, while solid blue line is the data collection. With these reforms, LICs can reduce the probabil- median. A.B. The sample includes 30 low-income countries. ity of costly defaults, enhance debt transparency, support sustaina- B. Figure shows the percent of low-income countries eligible to access the IMF’s concessional lending facilities that are either at high risk of, or in, debt distress. ble financial sector development, and reduce economic volatility. C. Standard deviation represents the median standard deviation of foreign direct investment in percent of GDP from 2000 to 2017. 7   January 2019 (Percent change, y/y) (Percent change y/y) Recent releases: December 29, 2018 - January 23, 2019 Upcoming releases: January 24, 2019 - February 23, 2019 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous South Korea 12/30/18 CPI DEC 1.3 % 1.7 % 2.0 % Australia 1/29/19 CPI Q4 1.9 % Thailand 1/2/19 CPI DEC 0.36 % 1% -2.0% Germany 1/30/19 CPI JAN 1.7 % Indonesia 1/2/19 CPI DEC 3.1 % 3.2 % France 1/30/19 GDP Q4 2.3 % Turkey 1/3/19 CPI DEC 20.30 % 21.62 % United States 1/30/19 GDP Q4 3.0 % Philippines 1/4/19 CPI DEC 2.9 % 6.0 % Belgium 1/30/19 GDP Q4 1.6 % Italy 1/4/19 CPI DEC 1.1 % 1.6 % Austria 1/31/19 GDP Q4 2.2 % Mexico 1/9/19 CPI DEC 4.8 % 4.7 % Spain 1/31/19 GDP Q4 2.4 % China 1/9/19 CPI DEC 1.9 % 2.2 % Euro Area 1/31/19 GDP Q4 1.6 % Romania 1/11/19 GDP Q3 4.2 % 4.3 % Indonesia 2/7/19 GDP Q4 5.17 % Czech Republic 1/11/19 GDP Q3 2.4 % 2.4 % Mexico 2/7/19 CPI JAN 4.8 % Brazil 1/11/19 CPI DEC 3.75 % 4.05 % Brazil 2/8/19 CPI JAN 3.75 % United States 1/11/19 CPI DEC 1.9 % 2.2 % UK 2/11/19 GDP Q4 1.5 % France 1/15/19 CPI DEC 1.6 % 1.9 % Japan 2/13/19 GDP Q4 -0.3 % Germany 1/16/19 CPI DEC 1.7 % 2.3 % Malaysia 2/14/19 GDP Q3 4.4 % UK 1/16/19 CPI DEC 2.1 % 2.3 % 2.3 % Italy 2/14/19 GDP Q4 0.7 % Euro Area 1/17/19 CPI DEC 1.6 % 1.9 % Germany 2/14/19 GDP Q4 1.1 % Japan 1/17/19 CPI DEC 0.3 % 0.3 % 0.8 % Poland 2/14/19 GDP Q4 5.1 % Canada 1/18/19 CPI DEC 2.0 % 1.7 % Bulgaria 2/14/19 GDP Q4 3.1 % China 1/20/19 GDP Q4 6.4 % 6.4 % 6.5 % Portugal 2/14/19 GDP Q4 2.1 % South Korea 1/21/19 GDP Q4 3.1 % 2.2 % 2.0 % Thailand 2/18/19 GDP Q4 3.3 % South Africa 1/23/19 CPI DEC 4.5 % 5.2 % Mexico 2/22/19 GDP Q4 2.5 % 8   January 2019 TABLE B: Activity and Inflation (Percent change y/y, except quarterly data on industrial production, which are percent change q/q, annualized) 2017   2018  2017 2018   2016 2017 Q4 Q1 Q2 Q3 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Industrial production, sa 1 World 2.1 3.9 5.7 3.7 2.7 2.2 4.5 4.5 4.6 4.2 4.4 3.8 3.5 3.8 3.5 3.4 3.6 2.2 Advanced economies 0.1 2.5 5.1 0.0 3.0 1.0 3.5 2.5 2.9 3.1 2.5 2.5 2.5 2.2 2.4 2.2 2.5 0.7 Emerging market and developing economies 4.2 5.3 6.2 7.5 2.3 3.4 5.5 6.5 6.3 5.3 6.3 5.1 4.5 5.4 4.6 4.5 4.7 3.6 Commodity-exporting EMDEs 0.5 2.6 1.6 4.6 -3.3 4.7 2.3 3.8 3.2 3.2 4.9 0.8 -0.4 2.5 1.8 1.3 2.1 1.8 Other EMDEs 5.3 6.0 7.5 8.2 3.8 3.1 6.5 7.3 7.2 5.8 6.6 6.3 5.8 6.2 5.3 5.3 5.4 4.1 East Asia and Pacific 5.9 6.1 5.8 9.6 3.4 3.0 5.7 7.2 7.0 5.7 7.0 6.3 4.6 5.6 5.5 5.1 5.5 5.1 East Asia excl. China 4.6 3.7 0.3 13.6 -9.9 5.1 2.9 7.4 5.9 3.8 7.2 3.7 -4.2 3.1 1.5 1.2 2.7 2.6 Europe and Central Asia 3.4 5.9 6.9 5.7 2.6 2.3 6.4 7.6 7.3 5.7 5.9 5.5 4.5 6.0 3.8 3.4 3.2 1.9 Latin America and Caribbean -2.2 0.9 3.8 2.2 -1.7 3.0 2.2 1.5 1.8 2.9 4.4 -1.4 2.9 2.2 1.8 1.3 1.0 0.3 Middle East and North Africa -1.1 5.9 3.6 -8.9 4.2 7.9 8.7 2.2 2.7 4.5 2.2 1.2 5.2 3.7 -4.0 5.0 -2.1 -1.7 South Asia 5.3 4.6 12.3 5.8 -2.1 8.4 7.6 8.1 7.2 5.5 5.4 4.5 6.3 7.8 4.3 5.9 7.6 0.8 Sub-Saharan Africa 1.2 0.1 7.3 -8.3 0.7 9.4 3.3 1.3 0.7 1.0 -1.7 1.3 1.8 2.5 1.6 2.0 2.6 1.6 Inflation, sa 2 World 1.4 2.2 2.3 2.2 2.3 2.5 2.3 2.2 2.3 2.3 2.3 2.1 2.4 2.4 2.5 2.4 2.4 2.3 Advanced economies 0.3 1.4 1.4 1.3 1.8 2.1 1.5 1.5 1.2 1.3 1.5 1.8 2.1 2.1 2.1 2.2 2.2 2.0 Emerging market and developing economies 2.6 3.1 2.8 2.9 2.8 3.0 3.0 2.9 2.9 2.7 2.7 2.8 2.8 2.9 3.0 3.0 3.1 2.8 Commodity-exporting EMDEs 3.4 3.3 2.8 2.9 2.7 2.9 3.1 2.9 2.9 2.7 2.5 2.7 2.5 2.5 2.6 2.9 2.7 2.7 Other EMDEs 1.3 2.9 2.8 2.9 2.9 3.4 3.0 2.9 3.1 2.8 2.8 2.8 3.0 3.3 3.4 3.6 3.6 3.1 East Asia and Pacific 2.0 2.3 2.4 2.5 3.2 3.1 2.5 2.6 2.7 2.5 2.6 3.0 3.0 2.8 2.9 3.0 2.7 2.1 Europe and Central Asia 0.4 2.4 2.8 2.7 2.2 2.8 2.8 2.5 2.7 2.6 2.3 2.1 2.3 2.4 3.0 2.4 2.2 2.0 Latin America and Caribbean 2.4 2.6 2.5 2.6 2.4 3.2 2.6 2.6 2.5 2.7 2.7 2.1 2.5 2.6 3.1 3.3 3.4 3.0 Middle East and North Africa 2.1 1.6 2.2 2.8 2.7 2.2 1.9 2.9 2.9 2.6 2.5 2.8 2.8 2.7 2.3 2.1 2.0 2.1 South Asia 4.4 3.8 3.7 4.2 4.4 4.7 4.3 4.4 4.1 3.7 4.1 4.1 4.5 4.5 4.6 5.2 5.4 5.4 Sub-Saharan Africa 5.2 5.5 4.4 3.8 3.4 3.1 4.7 4.4 3.7 3.7 3.5 3.3 3.3 3.1 2.9 3.0 3.9 4.0 Sources: Haver Analytics, IMF International Financial Statistics, World Bank. 1 Industrial production is total production (may exclude construction). When data are unavailable, "industrial production, manufacturing" is used as a proxy. 2 Median inflation rate for each grouping. TABLE C: Trade and Finance (Percent change y/y, except quarterly trade data, which are percent change q/q, annualized, and international reserves data, which are percent change over the previous period) 2017   2018 2017   2018   2016 2017 Q4 Q1 Q2 Q3 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Exports, nominal, US$, sa World -2.9 10.4 13.8 13.8 25.8 -4.6 12.0 17.4 17.4 9.9 16.7 10.8 10.0 11.9 6.8 4.5 10.8 2.2 Advanced economies -0.9 9.7 10.6 10.6 23.4 -5.1 12.0 18.2 13.0 11.9 17.3 9.5 9.3 10.2 5.1 1.3 9.0 0.5 Emerging market and developing economies -6.2 11.8 19.8 19.8 30.2 -3.6 12.1 15.9 25.6 6.4 15.9 13.1 11.4 15.1 10.2 10.5 14.1 5.4 Commodity-exporting EMDEs -8.2 17.5 23.5 23.5 30.0 -1.0 13.7 20.4 15.2 12.9 23.6 15.5 16.1 23.0 13.7 9.6 18.9 9.6 Other EMDEs -4.5 9.5 18.2 18.2 30.3 -4.7 11.4 14.1 30.0 3.8 12.8 12.1 9.4 11.9 8.8 10.8 12.3 3.8 East Asia and Pacific -6.1 10.0 16.0 16.0 33.3 -4.5 11.1 13.9 33.0 1.2 12.2 11.7 10.4 12.4 8.9 11.0 13.6 3.0 Europe and Central Asia -6.0 16.6 28.9 28.9 37.5 -1.4 16.2 26.6 20.8 14.9 27.5 19.8 13.9 23.8 13.6 11.1 16.6 11.1 Latin America and Caribbean -2.4 11.9 14.2 14.2 21.1 -6.2 8.9 12.0 11.8 10.6 13.4 7.1 6.4 12.1 9.5 6.2 10.5 7.8 Middle East and North Africa - - - - - - - - - - - - - - - - - - South Asia 0.6 5.6 21.3 21.3 5.8 4.7 11.6 7.3 10.1 5.4 9.1 20.1 4.7 14.0 3.4 23.1 18.3 13.0 Sub-Saharan Africa -8.4 14.8 19.8 19.8 24.8 -5.0 9.5 11.8 15.8 10.2 18.0 14.1 16.1 17.1 12.7 9.5 - - Imports, nominal, US$, sa World -5.3 12.2 32.9 32.9 15.5 5.0 19.5 16.3 21.3 9.0 25.2 4.4 10.1 12.6 2.4 24.6 13.9 3.1 Advanced economies -3.4 9.1 16.7 16.7 23.0 -3.5 13.8 18.7 15.3 11.9 18.6 10.0 9.2 11.9 7.0 3.8 10.9 2.7 Emerging market and developing economies -6.4 13.9 42.5 42.5 11.7 9.7 22.7 15.0 24.7 7.4 28.8 1.7 10.6 13.0 -0.2 37.5 15.5 3.5 Commodity-exporting EMDEs -7.3 13.2 50.5 50.5 2.9 16.5 25.8 10.0 29.2 6.0 32.3 -2.0 10.3 11.7 -3.9 47.9 16.0 - Other EMDEs -3.0 16.4 18.7 18.7 46.2 -9.8 13.0 32.6 11.1 12.2 17.9 16.9 11.7 18.0 12.2 8.9 14.2 3.7 East Asia and Pacific -3.7 17.5 18.1 18.1 60.6 -12.8 10.4 37.8 9.2 11.9 21.9 20.8 11.6 21.3 16.7 11.9 19.3 4.7 Europe and Central Asia -1.2 18.6 17.2 17.2 38.2 -20.9 23.5 30.3 22.0 17.7 19.3 9.8 7.6 6.5 -1.0 -1.8 0.6 -1.1 Latin America and Caribbean -7.3 8.3 17.3 17.3 24.7 5.5 7.0 13.9 14.3 4.2 21.4 12.7 9.6 23.0 13.6 6.2 16.0 11.7 Middle East and North Africa - - - - - - - - - - - - - - - - - - South Asia -5.4 22.7 33.7 33.7 22.6 11.4 19.3 24.4 11.9 7.9 4.9 16.0 20.7 23.7 19.9 10.9 15.5 3.6 Sub-Saharan Africa -12.7 4.7 27.3 27.3 - - 15.3 - - - - - - - - - - - International reserves, US$1 World -2.0 7.2 1.2 1.2 1.4 -1.2 0.7 1.4 -0.5 0.5 -0.5 -0.5 -0.2 0.0 -0.1 -0.5 -0.8 0.4 Advanced economies 3.2 10.0 1.1 1.1 1.3 -0.8 0.8 1.3 -0.5 0.5 -1.0 -0.2 0.4 -0.1 0.1 0.0 -0.7 0.4 Emerging market and developing economies -5.2 5.3 1.3 1.3 1.4 -1.5 0.6 1.4 -0.5 0.5 -0.2 -0.7 -0.6 0.0 -0.3 -0.8 -0.9 0.5 Commodity-exporting EMDEs -4.5 3.6 1.2 1.2 2.0 -0.5 0.3 1.3 -0.3 1.1 0.8 -0.4 -0.8 -0.2 0.2 - - - Other EMDEs -5.7 6.1 1.3 1.3 1.1 -2.0 0.8 1.5 -0.6 0.3 -0.6 -0.8 -0.6 0.2 -0.5 -0.8 -1.1 0.4 East Asia and Pacific -7.3 5.6 1.3 1.3 0.6 -1.4 0.9 1.1 -0.8 0.4 -0.5 -0.5 -0.3 0.1 -0.2 -0.8 -1.0 0.4 Europe and Central Asia 3.4 10.3 1.0 1.0 4.3 -3.3 -0.3 3.5 0.2 0.6 -0.5 -1.2 -1.6 0.9 -1.1 -0.8 -0.2 1.6 Latin America and Caribbean 1.3 2.2 -1.0 -1.0 1.6 -1.9 -0.8 1.3 0.0 0.3 -0.2 -0.3 -1.3 0.4 -0.2 -1.1 -0.1 0.5 Middle East and North Africa -10.7 - - - - - - - - - - - - - - - - - South Asia 3.6 11.8 2.3 2.3 2.5 -3.8 2.1 2.4 -0.2 0.3 -0.2 -2.4 -1.2 -0.7 -0.7 -0.8 -1.8 -0.1 Sub-Saharan Africa -2.9 10.4 6.3 6.3 8.5 1.0 1.5 1.7 0.9 5.7 1.1 2.1 -2.0 -0.2 -3.3 - - - Sources: Haver Analytics, IMF International Financial Statistics, World Bank. 1Total reserves excluding gold are used as proxies when total reserves data are unavailable. 9     January 2019 TABLE D: Financial Markets (Percent change y/y, except quarterly trade data, which are percent change q/q, annualized, and international reserves data, which are percent change over the previous period) 2018 2018 MRV 1 2017 2018 Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.97 0.97 1.40 1.67 1.88 2.16 1.38 1.38 1.45 1.63 1.63 1.77 1.88 1.88 1.90 2.13 2.13 2.22 2.38 ECB repo 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 US$ LIBOR 3-months 1.26 1.26 1.93 2.34 2.34 2.63 1.73 1.87 2.18 2.35 2.34 2.33 2.34 2.32 2.35 2.46 2.65 2.79 2.78 EURIBOR 3-months -0.33 -0.33 -0.33 -0.33 -0.32 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.32 -0.32 -0.32 -0.32 -0.32 -0.32 -0.31 -0.31 US 10-yr Treasury yield 2.33 2.33 2.76 2.92 2.92 3.03 2.58 2.86 2.84 2.87 2.97 2.91 2.89 2.89 3.00 3.16 3.12 2.83 2.74 German Bund, 10 yr 0.37 0.37 0.57 0.42 0.28 0.29 0.50 0.67 0.54 0.48 0.46 0.33 0.25 0.26 0.35 0.37 0.32 0.19 0.15 Spreads (basis points) JP Morgan Emerging Markets 325 325 309 351 378 402 299 309 319 322 353 377 366 383 386 377 405 423 399 Asia 164 164 157 185 189 202 146 156 168 171 186 197 193 185 189 190 204 211 195 Europe 243 243 221 275 313 316 212 217 234 246 277 301 291 329 318 299 316 334 315 Latin America & Caribbean 429 429 418 455 487 523 410 420 423 422 459 486 471 493 498 492 528 549 515 Middle East 385 385 367 429 464 497 359 366 374 385 432 472 451 464 478 453 497 541 579 Africa 376 376 320 385 440 481 305 317 337 342 379 436 420 445 455 445 485 515 488 Stock Indices (end of period) Global (MSCI) 508 508 500 505 524 456 502 517 500 510 509 505 520 524 524 484 491 456 484 Advanced Economies ($ Index) 2086 2086 2042 2089 2184 1884 2053 2113 2042 2087 2093 2089 2153 2179 2184 2019 2041 1884 2001 United States (S&P 500) 2668 2668 2590 2718 2923 2507 2631 2711 2590 2648 2729 2718 2816 2902 2923 2712 2760 2507 2623 Europe (S&P Euro 350) 1558 1558 1493 1533 1548 1368 1518 1522 1493 1556 1545 1533 1581 1547 1548 1454 1450 1368 1441 Japan (Nikkei 225) 22530 22530 21203 22305 24021 20019 21650 21794 21203 22488 22095 22305 22554 22788 24021 21920 22351 20019 20623 Emerging Market and Developing 1139 1139 1167 1070 1048 966 1158 1202 1167 1164 1121 1070 1087 1055 1048 954 995 966 1018 Economies (MSCI) EM Asia 577 577 589 552 537 485 584 603 589 587 582 552 553 546 537 476 503 485 506 EM Europe 341 341 350 312 313 292 354 370 350 335 316 312 319 294 313 293 301 292 313 EM Europe & Middle East 275 275 280 253 259 246 285 295 280 271 257 253 263 246 259 247 252 246 261 EM Latin America & Caribbean 2811 2811 3008 2477 2577 2566 2945 3095 3008 2988 2561 2477 2702 2466 2577 2684 2600 2566 2847 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.89 0.89 0.81 0.84 0.86 0.88 0.82 0.81 0.81 0.81 0.85 0.86 0.86 0.87 0.86 0.87 0.88 0.88 0.88 Japan 112.11 112.11 107.94 109.16 111.52 112.74 109.83 107.96 106.02 107.62 109.72 110.13 111.45 111.03 112.09 112.76 113.40 112.06 109.69 Emerging and Developing Economies Brazil 3.19 3.19 3.24 3.61 3.95 3.81 3.19 3.25 3.28 3.41 3.64 3.79 3.82 3.93 4.10 3.76 3.80 3.89 3.75 China 6.76 6.76 6.35 6.38 6.81 6.92 6.41 6.32 6.32 6.30 6.37 6.47 6.72 6.85 6.86 6.93 6.94 6.88 6.78 Egypt 17.85 17.85 17.68 17.80 17.90 17.92 17.74 17.67 17.63 17.68 17.83 17.88 17.90 17.88 17.92 17.92 17.93 17.93 17.88 India 65.11 65.11 64.40 66.99 70.19 72.04 63.72 64.44 65.06 65.69 67.49 67.79 68.74 69.62 72.22 73.59 71.83 70.71 71.19 Russia 58.31 58.31 56.96 62.03 65.64 66.74 56.93 56.81 57.15 61.01 62.28 62.81 62.83 66.48 67.60 65.86 66.69 67.66 66.27 South Africa 13.31 13.31 11.93 12.65 14.09 14.31 12.15 11.82 11.84 12.10 12.52 13.33 13.39 14.13 14.75 14.54 14.10 14.31 13.84 Memo: U.S. nominal effective rate 119.6 119.6 114.1 116.6 120.4 122.5 114.7 113.7 113.9 113.9 117.0 118.9 119.6 120.6 120.9 121.7 123.0 122.8 121.2 (index) Sources: Bloomberg, J.P. Morgan, and World Bank. 1 MRV = most recent value. TABLE E: Commodity Prices 2018 2018 MRV 1 2017 2018 Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Energy 2 68 68 82 89 93 84 85 81 81 86 92 91 92 90 96 97 82 73 73 Non-energy 2 84 84 88 89 83 81 87 88 88 90 90 88 84 83 81 82 81 81 81 Agriculture 2 87 87 89 91 85 83 87 89 90 92 92 89 86 85 83 83 82 83 83 Metals and minerals 2 79 79 88 88 80 79 89 89 85 87 88 88 81 79 79 81 79 77 75 Memo items: Crude oil, average ($/bbl) 53 53 64 71 73 64 66 63 64 69 73 72 73 71 75 77 62 54 59 Gold ($/toz) 1258 1258 1329 1307 1213 1229 1331 1331 1325 1335 1303 1282 1238 1202 1198 1215 1221 1250 1250 Baltic Dry Index 1152 1152 1171 1256 1602 1356 1234 1130 1149 1126 1289 1352 1649 1710 1447 1545 1201 1322 1077 Sources: World Bank, World Bank Commodities Price Data (The Pink Sheet), Bloomberg. 1 MRV = most recent value. 2 Indexes, 2010 = 100. © 2019 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank with external contributions. 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