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Overview

The External Environment for Developing Countries June 2010 The World Bank Development Economics Prospects Group. Overview. CDS spreads have risen by 60 bp or more in 7 European countries. Source: Bloomberg, World Bank. Spreads have risen, but remain close to earlier levels.

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Overview

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  1. The External Environment for Developing CountriesJune 2010The World BankDevelopment EconomicsProspects Group

  2. Overview

  3. CDS spreads have risen by 60 bp or more in 7 European countries Source: Bloomberg, World Bank.

  4. Spreads have risen, but remain close to earlier levels EMBI spreads, index January 1, 2010=100 Source: World Bank, JP Morgan.

  5. Euro Area Crisis

  6. CDS spreads for selected EMsSpreads on credit default swaps Source: JP Morgan and World Bank data

  7. Spreads on highly-indebted European bonds increasing again 10-year government bond spread over comparable German debt (basis points) Sources: Bloomberg and DECPG staff calculation

  8. Substantial uncertainty characterizes equity market developments Dow Jones, DAX and CACI [Left], VIX and VSTOXX indices [Right] Source: Thomson/Datastream.

  9. OECD developments

  10. Consumer confidence and retail turnoverfall in affected countries**retail sales, ch% (3mma , y/y) [left]; consumer sentiment index, dispersion [right] Source: National Agencies. ** Greece, Portugal and Spain.

  11. Although exports are recovering, EU growth remains weak

  12. German export orders, export volumesand production reviving in spring 2010 factory orders from abroad, export volumes, industrial production, ch% saar Source: Eurostat

  13. U.S. indicators point to favorablegrowth outturns for the second quartercapital goods orders, retail sales and export volumes, ch% (3m/3m, saar) Source: U.S. Department of Commerce

  14. Japanese industrial production catching up Source: U.S. Department of Commerce

  15. Developing country first quarter growth strong, save for ECA region Source: Haver Analytics and World Bank data.

  16. Country Focus: Hungary

  17. Fiscal and External Balances – 2010percent of GDP Source: European Commission, BofA/ML

  18. Composition of debt flows – Hungary(billions of U.S. dollars) Source: Economist Intelligence Unit

  19. External debt in Hungarypercent of GDP Source: Moody’s

  20. Industrial Production

  21. Euro Area output remains robust in April on demand for intermediate goods Source: DECPG

  22. ZEW economic sentiment deteriorated for all markets in June in the aftermath of the sovereign debt crisis Source: ZEW Survey.

  23. Momentum in China is easing gradually, but remains robust ,while growth in the U.S. stepped up in May Source: DECPG

  24. International Trade

  25. Exports from some developing regions have returned to pre-crisis levels

  26. Chinese capital goods exports to developing countries

  27. Number of Trade Measures Implemented Worldwide and by the G20 Source: Global Trade Alert

  28. Commodity Prices

  29. Crude oil prices rebound $/bbl WTI Brent Dubai Source: Datastream and DECPG.

  30. U.S. oil demand surges (y/y)(3 month moving average) kb/d Source: U.S. EIA and DECPG.

  31. Non-OPEC oil production rising mb/d Non-OPEC Non-OPEC x FSU OPEC Source: IEA and DECPG.

  32. Raw materials and beverage prices remain strong in June (2000=100) Source: DECPG.

  33. Metals prices stabilize $/ton ‘000 tons Aluminum price LME stocks Source: Datastreamand DECPG.

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

  35. International Finance

  36. Capital flows were sluggish in May Source: DECPG.

  37. European banks have big exposure to Europe’s troubled economies Total claims by euro-zone banks at the end of 2009 ($ billion) Sources: The Bank for International Settlements

  38. EM assets rebounded from May sell-off MSCI EM index in USD [L]; EMBIG bond index [R] EM bond index [R] EM equity index [L] Sources: Bloomberg, JPMorgan, and DECPG staff calculation

  39. Currencies and inflation

  40. Dollar gains vs euro and yen continuesbut China RMB led to short-rally in other units USD per Euro (inverse) [Left] and Yen per USD [right] USD/Euro (inverse) yen/USD Source: Thomson/Datastream.

  41. China RMB rose on an effective basis recently Currency indexes: USD per RMB; Dollar and RMB effective. USD per RMB index China effective U.S. effective Source: World Bank data.

  42. Inflation among developing countries (save SAR)converging toward 5% paceheadline consumer price index, ch% (yr-on-yr) Source: National Agencies.

  43. The External Environment for Developing CountriesJune 2010The World BankDevelopment EconomicsProspects Group

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