For more information, visit http://www.worldbank.org/prospects October 19, 2018
Taking Stock
U.S. industrial production continued to rise in September; retail sales growth and new housing starts were weak.
U.S. industrial production rose 0.3 percent (m/m, sa) in September, down slightly from a 0.4 gain in August (Figure 1).
Manufacturing output—the largest component of industrial production—and mining production rose 0.2 percent and 0.5
percent in September, respectively, while utility output remained unchanged after surging 1.1 percent in August. For the
second straight month, retail sales rose only 0.1 percent (m/m) in September, as spending at bars and restaurants fell 1.8
percent, the biggest drop since December 2016. Meanwhile, new-home construction fell 5.4 percent (m/m) in September,
led by a sharp drop in multifamily home starts, amid disruptions from Hurricane Florence and rising mortgage rates.
Euro Area headline inflation edged up in September; exports rebounded in August. Euro Area headline consumer
price inflation in September was confirmed at 2.1 percent (y/y), up slightly from 2 percent in August, mainly reflecting higher
costs of energy. Meanwhile, core inflation—which excludes energy, food, alcohol, and tobacco prices—was flat at 0.9 percent
(y/y) in September. Separately, the euro area trade surplus widened from a seasonally adjusted €12.6 billion in July to €16.6
billion in August as export values increased 2.1 percent (m/m, sa), while imports remained steady.
Japan’s industrial production rebounded; exports posted first decline in nearly 2 years. Japan’s industrial production
rose 0.2 percent (m/m) in August, below market expectations, after a 0.2 percent drop in July. Meanwhile, export fell 1.2
percent (y/y) in September, after growing 6.6 percent in August, suffering the first drop since November 2016. Japan’s trade
surplus fell 79 percent from a year earlier to ¥140 billion.
China GDP growth slowed in 18Q3; consumer inflation accelerated, while factory prices slowed. China’s GDP growth
edged down from 6.7 percent (y/y) in 18Q2 to 6.5 percent in 18Q3, the slowest growth since 09Q1 (Figure 2). Growth was
slightly below market expectations, but in line with the government’s annual target of around 6.5 percent. Meanwhile, China’s
consumer price index rose 2.5 percent (y/y) in September, up from 2.3 percent in August, due mainly to higher food prices.
The producer price index increased 3.6 percent (y/y) in September, down from 4.1 percent in August.
Bond issuance from EMDE decelerated in 18Q3. Sovereign and corporate borrowers across emerging market and
developing economies (EMDEs) raised only $48 billion through the international bond market in 18Q3, down sharply from
$108 billion in 18Q2 and $147 billion in 18Q1. Seasonal slowdown during the summer aside, the volume is the lowest since
15Q4 as risk appetite was low and borrowing costs increased.
Figure 1. U.S. industrial production expanded for a fourth Figure 2. China’s GDP growth slowed slightly in 2018Q3.
consecutive month in September.
U.S. industrial production growth. China’s real GDP growth.
Source: Federal Reserve Board. Source: National Bureau of Statistics of China.
Produced by DECPG.
Number 406 | October 19, 2018
Major Data Releases
(Percent change y-o-y) (Percent change y-o-y)
Recent releases: Friday, 12 October - Thursday, 18 October 2018 Upcoming releases: Friday, 19 October - Thursday, 25 October 2018
Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous
India 10/12/18 CPI Sep 3.8% 4.0% 3.7% Canada 10/19/18 CPI Sep 2.8%
China 10/16/18 CPI Sep 2.5% 2.5% 2.3% China 10/19/18 GDP Q3 2.3%
U.S. 10/16/18 IP Sep 5.1% 4.9% Japan 10/19/18 CPI Sep 1.3%
Euro Area 10/17/18 CPI Sep 2.1% 2.1% 2.0% South Africa 10/24/18 CPI Sep 4.9%
U.K. 10/17/18 CPI Sep 2.4% 2.6% 2.7% South Korea 10/24/18 GDP Q3 2.8%
Activity and Inflation
(Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized)
2017 2018 2017 2018
2016 2017 Q3 Q4 Q1 Q2 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
1
Industrial Production, sa
World 2.1 4.0 3.7 5.5 3.9 3.0 4.3 4.1 4.4 4.6 4.6 4.7 4.3 4.4 4.0 3.7 3.7 3.4
Advanced Economies 0.0 2.8 2.1 5.3 -0.2 3.1 3.0 3.1 3.5 3.6 2.7 3.0 3.2 2.5 2.7 2.5 2.1 2.2
Emerging Market and Developing Economies 4.2 5.2 5.3 5.7 8.0 3.0 5.7 5.1 5.4 5.6 6.6 6.4 5.3 6.3 5.3 4.9 5.4 4.6
Commodity-exporting EMDE 0.6 2.6 4.4 1.1 5.6 0.1 3.7 3.0 2.5 2.3 3.9 3.3 3.3 5.1 1.8 1.5 3.2 2.9
Other EMDE 5.3 6.0 5.5 7.0 8.6 3.7 6.2 5.7 6.2 6.5 7.3 7.3 5.9 6.6 6.3 5.7 5.9 5.1
East Asia and Pacific 5.9 6.1 4.9 5.6 10.1 4.8 6.4 5.8 5.7 5.8 7.2 7.1 5.7 7.1 6.7 5.2 5.9 5.9
East Asia excl. China 4.6 3.7 6.6 0.3 14.9 -2.2 5.3 2.7 3.0 2.9 7.5 6.0 3.8 7.6 5.9 0.7 4.9 4.1
Europe and Central Asia 3.4 5.9 6.1 5.9 7.0 1.7 7.9 5.9 5.8 6.4 7.8 7.5 5.9 5.8 5.3 4.3 5.8 3.6
Latin America and Caribbean -2.2 0.7 4.1 2.4 3.4 -1.7 0.8 1.7 1.6 2.1 1.6 1.8 3.0 4.4 -1.3 3.0 2.2 2.0
Middle East and North Africa -1.1 5.9 17.2 1.2 -9.1 3.7 3.1 6.1 7.1 8.6 2.2 2.7 4.5 2.0 1.4 5.1 3.6 -5.5
South Asia 5.3 4.7 7.2 12.4 4.9 -2.3 4.7 3.7 8.9 7.6 8.1 7.3 5.5 5.6 4.5 6.1 5.7 1.9
Sub-Saharan Africa 1.2 0.1 2.9 8.1 -7.4 0.3 -1.0 2.1 2.4 3.2 1.7 0.9 1.2 -1.3 1.8 2.0 2.4 1.5
Inflation, sa 2
World 1.4 2.2 2.2 2.2 2.3 2.3 2.2 2.3 2.3 2.3 2.4 2.3 2.4 2.3 2.1 2.4 2.4 2.5
Advanced Economies 0.3 1.4 1.5 1.4 1.3 1.8 1.5 1.4 1.5 1.5 1.5 1.4 1.4 1.6 1.9 2.1 2.1 2.0
Emerging Market and Developing Economies 2.6 3.2 3.0 2.8 3.0 2.7 3.2 3.0 2.9 3.0 2.9 3.0 2.7 2.6 2.8 2.9 2.9 3.2
Commodity-exporting EMDE 3.5 3.4 3.3 2.8 2.9 2.5 3.2 3.0 2.9 2.9 2.9 2.9 2.7 2.5 2.4 2.5 2.5 2.6
Other EMDE 1.3 2.9 2.7 2.8 3.6 3.2 3.0 2.8 2.9 3.0 3.7 3.5 3.1 3.2 3.0 3.2 3.5 3.5
East Asia and Pacific 2.0 2.3 1.7 2.4 2.2 3.0 2.3 2.6 2.4 2.4 2.3 2.5 2.3 2.4 2.9 2.6 2.5 2.6
Europe and Central Asia 0.4 2.4 2.7 2.8 2.7 2.2 2.8 2.6 2.8 2.8 2.5 2.7 2.5 2.2 2.1 2.3 2.4 3.0
Latin America and Caribbean 2.4 2.6 2.5 2.5 2.9 3.1 2.6 2.3 2.5 2.6 2.9 2.9 3.1 3.0 3.0 3.2 2.9 3.2
Middle East and North Africa 2.1 1.6 1.1 2.2 2.8 2.7 1.6 2.1 1.7 1.9 2.9 2.9 2.6 2.6 2.8 3.0 3.2 3.1
South Asia 4.4 3.8 3.5 3.7 4.2 4.6 3.5 3.6 3.8 4.3 4.4 4.1 3.7 4.1 4.8 5.2 5.6 5.5
Sub-Saharan Africa 5.3 5.7 5.5 4.7 3.5 3.3 5.4 5.2 4.6 4.6 4.3 3.4 3.3 3.3 3.3 3.1 3.0 3.2
Sources: World Bank, Haver Analytics, and IMF International Financial Statistics.
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.
Trade and Finance
(Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period)
2017 2018 2017 2018
2016 2017 Q3 Q4 Q1 Q2 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Exports, Nominal, US$, sa
World -3.0 10.3 14.5 14.6 24.3 -2.4 11.1 12.4 13.2 11.7 17.0 16.8 9.2 16.3 10.6 10.2 12.0 -
Advanced Economies -0.8 9.5 18.2 11.3 22.0 -3.5 10.9 12.0 12.9 11.3 17.5 12.0 10.8 16.5 9.2 9.3 10.2 -
Emerging Market and Developing Economies -6.4 11.7 8.0 20.9 28.6 -0.2 11.4 13.3 13.8 12.3 16.1 25.8 6.4 16.1 13.4 11.8 15.4 -
Commodity-exporting EMDE -8.8 17.7 19.5 26.7 31.3 -1.4 17.0 20.9 15.9 14.5 20.9 15.3 13.3 23.6 15.3 16.2 23.4 -
Other EMDE -4.5 9.5 3.6 18.5 27.5 -0.2 9.2 10.3 12.9 11.4 14.1 30.3 3.7 13.1 12.5 9.9 12.4 -
East Asia and Pacific -6.1 9.9 2.7 16.1 28.8 1.3 9.9 10.0 12.9 10.9 14.0 33.1 0.9 12.4 11.9 10.8 12.9 9.5
Europe and Central Asia -6.1 16.5 17.1 30.3 40.3 -1.9 16.5 22.3 19.5 16.2 26.6 21.0 15.1 27.8 19.8 14.0 23.8 -
Latin America and Caribbean -2.4 12.0 7.8 15.5 21.2 -6.0 10.5 15.8 9.3 8.7 12.0 11.8 10.4 13.9 7.0 6.6 12.6 -
Middle East and North Africa - - - - - - - - - - - - - - - - - -
South Asia 0.6 5.6 12.3 22.9 6.8 11.4 4.7 4.1 12.2 11.6 7.3 10.1 5.5 9.0 20.3 10.7 11.7 -
Sub-Saharan Africa -13.1 15.4 12.3 31.4 24.4 - 8.4 17.5 17.8 17.1 14.5 15.2 12.3 - - - - -
Imports, Nominal, US$, sa
World -5.3 12.2 1.7 31.2 16.1 3.1 5.8 18.2 13.3 19.6 16.3 21.4 9.1 24.9 4.3 10.0 12.3 -
Advanced Economies -3.4 9.1 14.2 18.0 23.1 -3.5 9.1 14.7 14.1 13.9 18.6 15.3 12.1 18.5 10.0 9.2 11.6 -
Emerging Market and Developing Economies -6.4 13.9 -4.4 38.8 12.6 6.8 4.0 20.2 12.8 22.7 15.1 24.7 7.5 28.5 1.6 10.4 12.6 -
Commodity-exporting EMDE -7.3 13.2 -8.8 46.0 3.2 12.5 -0.2 21.2 11.3 25.9 10.1 29.3 6.1 31.9 -2.3 9.9 - -
Other EMDE -3.0 16.3 12.3 17.1 50.3 -9.7 17.7 16.8 18.1 12.6 32.5 11.1 12.1 17.7 17.2 11.8 18.2 11.7
East Asia and Pacific -3.7 17.4 15.1 15.1 68.3 -12.6 19.2 18.0 18.8 9.7 37.8 9.3 12.0 21.8 20.9 11.9 21.5 14.9
Europe and Central Asia -1.2 18.6 20.3 17.3 38.8 -21.4 20.2 21.4 23.7 23.4 29.6 21.8 17.7 19.2 9.0 6.5 6.6 -
Latin America and Caribbean -7.3 8.3 9.9 17.8 23.8 6.7 5.0 16.3 9.2 6.8 13.9 14.3 4.1 21.4 12.8 9.6 23.8 -
Middle East and North Africa - - - - - - - - - - - - - - - - - -
South Asia -5.4 22.8 -8.2 32.0 23.5 10.7 18.6 11.0 20.8 19.1 24.3 11.9 7.8 4.3 16.0 20.7 22.2 21.4
Sub-Saharan Africa -13.7 - - - - - - - - - - - - - - - - -
International Reserves, US$ 1
World -2.0 7.2 1.7 1.2 1.4 -1.2 0.3 0.0 0.5 0.7 1.4 -0.5 0.5 -0.5 -0.5 -0.2 0.0 -0.1
Advanced Economies 3.2 10.0 1.7 1.1 1.3 -0.8 0.3 -0.3 0.7 0.8 1.3 -0.5 0.5 -1.0 -0.2 0.4 -0.1 0.1
Emerging Market and Developing Economies -5.2 5.3 1.7 1.3 1.4 -1.5 0.4 0.2 0.4 0.6 1.4 -0.5 0.5 -0.2 -0.7 -0.6 0.0 -0.2
Commodity-exporting EMDE -4.4 3.5 0.7 1.2 2.1 - 0.1 0.6 0.4 0.2 1.4 -0.3 1.0 - - - - -
Other EMDE -5.7 6.1 2.2 1.3 1.1 -1.9 0.5 0.1 0.4 0.8 1.5 -0.6 0.3 -0.6 -0.8 -0.6 0.2 -0.5
East Asia and Pacific -7.3 5.6 2.1 1.3 0.6 -1.4 0.6 0.0 0.4 0.9 1.1 -0.8 0.4 -0.5 -0.5 -0.3 0.1 -0.2
Europe and Central Asia 3.4 10.2 3.1 0.9 4.3 -3.3 0.3 0.2 1.0 -0.3 3.5 0.2 0.6 -0.5 -1.2 -1.6 0.9 -1.1
Latin America and Caribbean 1.4 2.1 0.9 -0.9 1.8 -1.7 -0.1 0.5 -0.4 -0.9 1.5 0.0 0.3 -0.3 -0.4 -1.2 0.4 -0.2
Middle East and North Africa -10.7 - - - - - - - - - - - - - - - - -
South Asia 3.6 11.8 2.5 2.3 2.5 -3.5 0.1 -0.1 0.2 2.1 2.4 -0.2 0.3 -0.2 -2.5 -1.2 -0.8 -0.6
Sub-Saharan Africa -2.9 10.2 1.1 6.1 8.7 - 0.9 1.3 3.3 1.4 1.8 0.9 5.8 1.2 - - - -
Sources: World Bank, Haver Analytics, and IMF International Financial Statistics.
1
Total reserves excluding gold are used as proxies when total reserves data are unavailable.
Produced by DECPG.
Number 406 | October 19, 2018
Financial Markets
2017 2018 2017 2018 MRV 1
2016 2017 Q4 Q1 Q2 Q3 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Interest rates and LIBOR (percent)
U.S. Fed Funds Effective 0.39 0.97 1.17 1.40 1.67 1.88 1.13 1.13 1.27 1.38 1.38 1.45 1.63 1.63 1.77 1.88 1.88 1.90 2.13
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 0.74 1.26 1.47 1.93 2.34 2.34 1.36 1.43 1.61 1.73 1.87 2.18 2.35 2.34 2.33 2.34 2.32 2.35 2.47
EURIBOR 3-months -0.26 -0.33 -0.33 -0.33 -0.33 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.32 -0.32 -0.32 -0.32 -0.32
US 10-yr Treasury yield 1.84 2.33 2.37 2.76 2.92 2.92 2.36 2.35 2.41 2.58 2.86 2.84 2.87 2.97 2.91 2.89 2.89 3.00 3.17
German Bund, 10 yr 0.11 0.37 0.38 0.57 0.42 0.28 0.43 0.37 0.36 0.50 0.67 0.54 0.48 0.46 0.33 0.25 0.26 0.35 0.35
Spreads (basis points)
JP Morgan Emerging Markets 410 325 313 309 351 378 306 320 312 299 309 319 322 353 377 366 383 386 375
Asia 221 164 151 157 185 189 148 153 151 146 156 168 171 186 197 193 185 189 190
Europe 302 243 233 221 275 313 226 244 229 212 217 234 246 277 301 291 329 318 296
Latin America & Caribbean 537 429 416 418 455 487 407 422 419 410 420 423 422 459 486 471 493 498 491
Middle East 517 385 400 367 429 464 381 421 398 359 366 374 385 432 472 451 464 478 444
Africa 518 376 350 320 385 440 360 359 332 305 317 337 342 379 436 420 445 455 438
Stock Indices (end of period)
Global (MSCI) 424 508 508 500 505 524 497 505 508 502 517 500 510 509 505 520 524 524 501
Advanced Economies ($ Index) 1761 2086 2086 2042 2089 2184 2037 2077 2086 2053 2113 2042 2087 2093 2089 2153 2179 2184 2091
United States (S&P 500) 2258 2668 2668 2590 2718 2923 2575 2648 2668 2631 2711 2590 2648 2729 2718 2816 2902 2923 2809
Europe (S&P Euro 350) 1475 1558 1558 1493 1533 1548 1600 1563 1558 1518 1522 1493 1556 1545 1533 1581 1547 1548 1476
Japan (Nikkei 225) 19302 22530 22530 21203 22305 24021 22198 22730 22530 21650 21794 21203 22488 22095 22305 22554 22788 24021 22841
Emerging Market and Developing Economies (MSCI) 861 1139 1139 1167 1070 1048 1119 1121 1139 1158 1202 1167 1164 1121 1070 1087 1055 1048 985
EM Asia 419 577 577 589 552 537 571 572 577 584 603 589 587 582 552 553 546 537 490
EM Europe 295 341 341 350 312 313 330 330 341 354 370 350 335 316 312 319 294 313 305
EM Europe & Middle East 248 275 275 280 253 259 268 265 275 285 295 280 271 257 253 263 246 259 253
EM Latin America & Caribbean 2341 2811 2811 3008 2477 2577 2809 2719 2811 2945 3095 3008 2988 2561 2477 2702 2466 2577 2774
Exchange Rates (LCU / USD)
Advanced Economies
Euro Area 0.90 0.89 0.85 0.81 0.84 0.86 0.85 0.85 0.84 0.82 0.81 0.81 0.81 0.85 0.86 0.86 0.87 0.86 0.87
Japan 108.80 112.11 112.75 107.94 109.16 111.52 112.93 112.81 112.51 109.83 107.96 106.02 107.62 109.72 110.13 111.45 111.03 112.09 112.60
Emerging and Developing Economies
Brazil 3.49 3.19 3.24 3.24 3.61 3.95 3.19 3.26 3.28 3.19 3.25 3.28 3.41 3.64 3.79 3.82 3.93 4.10 3.68
China 6.65 6.76 6.61 6.35 6.38 6.81 6.62 6.62 6.59 6.41 6.32 6.32 6.30 6.37 6.47 6.72 6.85 6.86 6.93
Egypt 10.12 17.85 17.71 17.68 17.80 17.90 17.64 17.68 17.81 17.74 17.67 17.63 17.68 17.83 17.88 17.90 17.88 17.92 17.92
India 67.19 65.11 64.71 64.40 66.99 70.19 65.07 64.85 64.20 63.72 64.44 65.06 65.69 67.49 67.79 68.74 69.62 72.22 73.61
Russia 67.06 58.31 58.47 56.96 62.03 65.64 57.76 58.97 58.70 56.93 56.81 57.15 61.01 62.28 62.81 62.83 66.48 67.60 65.48
South Africa 14.71 13.31 13.62 11.93 12.65 14.09 13.71 14.06 13.11 12.15 11.82 11.84 12.10 12.52 13.33 13.39 14.13 14.75 14.24
Memo: U.S. nominal effective rate (index) 119.7 119.6 117.5 114.1 116.6 120.4 117.5 117.7 117.4 114.7 113.7 113.9 113.9 117.0 118.9 119.6 120.6 120.9 121.7
Sources: World Bank, Bloomberg, Haver Analytics, and J.P. Morgan.
1
MRV = Most Recent Value.
Commodity Prices
2017 2018 2017 2018 MRV 1
2016 2017 Q4 Q1 Q2 Q2 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Aug
Energy 2 55 68 75 82 82 90 71 76 78 85 81 81 86 92 91 92 90 95 95
Non-energy 2 79 84 84 88 88 89 84 85 84 87 88 88 90 90 88 84 83 81 81
Agriculture 2 87 87 85 88 88 91 85 85 85 87 88 90 92 92 89 86 85 83 83
Metals and minerals 2 64 79 84 88 88 88 84 84 85 89 89 85 87 88 88 81 79 79 79
Memo items:
Crude oil, average ($/bbl) 43 53 59 64 64 71 55 60 61 66 63 64 69 73 72 73 71 75 77
Gold ($/toz) 1249 1258 1275 1329 1329 1307 1280 1282 1264 1331 1331 1325 1335 1303 1282 1238 1202 1198 1198
Baltic Dry Index 676 1152 1509 1171 1171 1256 1484 1455 1589 1234 1130 1149 1126 1289 1352 1649 1710 1447 1578
Sources: World Bank, World Bank Commodities Price Data (The Pink Sheet), and Bloomberg.
1
MRV = Most Recent Value.
2
Indexes, 2010 = 100.
Produced by DECPG.
Number 406 | October 19, 2018