The document analyzes the impact of rising oil prices on the global economy. It finds that a rise in oil prices to $100/barrel due to stronger global demand will likely have a limited negative impact on global growth. However, a further $10-15/barrel rise due to Middle East supply disruptions could reduce global growth by 0.5% this year. A potential $150/barrel shock has a 10-15% probability and would reduce growth by over 2%, risking recession. Countries dependent on oil imports would see greater effects than oil producers.

1. Global
3 March 2011
Macro
Global Economic Perspectives Economics
Oil and the Global Economy: Table of Contents
Key Economic Forecasts .................................... Page 2
Global Markets Research
Oil and the Global Economy:
Measured Impact Measured Impact ............................................... Page 3
Central Bank Watch .......................................... Page 10
Global Data Monitor ......................................... Page 14
Over the past six months, oil prices have risen more than 50%, with more Charts of the Week .......................................... Page 15
than one-fourth of that rise coming in recent weeks as tensions in the Middle Global Week Ahead.......................................... Page 16
East have risen. We estimate that most of the rise on oil prices to date (i.e.,
Financial Forecasts .......................................... Page 18
to a level of about $100/barrel Brent) can be attributed to the strengthening
of aggregate demand in the global economy and therefore does not have Main Deutsche Bank
Global Economics Publications ...................... Page 19
significant negative implications for global growth.
If the roughly $10-15/barrel additional increase in oil prices in recent weeks
that can be attributed to concerns about possible disruptions to oil
production in and distribution from the Middle East to the rest of the world
is sustained, global growth could be reduced by about ½% this year relative
to our current baseline forecast for global growth in the vicinity of 4.3%.
The risk of a more severe disruption, while not high, has risen in the wake of
recent events, and we would put a 10-15% probability on oil prices rising to
$150/barrel in the near term and remaining near that for a time. Such a
shock would reduce global growth by an estimated 2.5%, moving it back into
recession territory. The positive effects of the shock on inflation would be
somewhat greater in terms of percentage points than the negative effect on
real GDP.
Countries that are more dependent on imported oil or do not have significant
domestic sources of energy would be hit more than the global average
(Japan and Korea, for example), while those with significant domestic
production of energy would be hit less. Everything else equal, industrial
countries would be hit less than emerging market economies given their
greater energy efficiency (lower dependence of output on energy input).
Impact of oil price shocks on GDP growth and inflation for year ahead
Mild oil shock Severe oil shock
Oil prices to stay at $110/brl Oil prices reach $150/brl
Research Team
GDP Inflation GDP Inflation
Peter Hooper
US -0.35 0.5 -1.75 2.6 (+1) 212 250-7352
peter.hooper@db.com
Euro Area -0.5 0.4 -2.3 1.8
Thomas Mayer
Japan -0.3 0.3 -1.5 1.5 (+49) 69910-30800
tom.mayer@db.com
Total Developing
-0.2 -1.0 Michael Spencer
countries
(+852) 220-38303
Asia ex Japan -0.8 0.7 -4.0 3.5 michael.spencer@db.com
World -0.4 -2.0
Source: DB Global Markets Research Torsten Slok
(+1) 212 250-2155
torsten.slok@db.com
Economics
Deutsche Bank Securities Inc.
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.
MICA(P) 007/05/2010

2. 3 March 2011 Global Economic Perspectives
Key Economic Forecasts
Real GDP Consumer Prices Current Account Fiscal Balance
% growthb % growthc % of GDPd % of GDP
2010F 2011F 2012F 2010F 2011F 2012F 2010F 2011F 2012F 2010F 2011F 2012F
US 2.8 3.5 3.9 1.6 2.2 2.4 -3.7 -4.1 -4.3 -8.8 -9.7 -6.9
Japan 3.9 1.6 2.2 -0.7 -0.1 -0.6 3.6 3.8 4.5 -8.7 -7.7 -7.4
Euroland 1.7 1.4 1.5 1.6 2.3 1.9 -0.6 0.0 0.4 -6.0 -4.8 -3.7
Germany 3.5 2.5 1.4 1.2 2.0 1.7 5.1 4.8 4.1 -3.7 -2.8 -2.0
France 1.5 1.2 1.6 1.7 1.7 1.6 -2.1 -2.2 -2.6 -7.6 -6.2 -4.8
Italy 1.1 0.9 1.2 1.5 2.1 1.9 -3.2 -2.8 -2.4 -5.0 -4.1 -3.1
Spain -0.1 0.6 1.1 1.8 1.8 1.6 -4.5 -4.5 -3.6 -9.0 -6.5 -4.8
UK 1.3 1.8 2.0 3.3 4.1 1.8 -2.4 -2.0 -1.7 -9.5 -7.9 -4.4
Sweden 5.3 3.5 2.5 1.3 1.5 2.0 6.8 6.5 6.0 -1.0 -0.5 0.5
Denmark 2.1 2.4 2.0 2.3 2.0 2.0 5.3 4.0 3.5 -5.3 -3.5 -3.0
Norway 0.4 1.5 2.5 2.4 1.5 2.0 12.8 12.9 13.0 6.8 7.5 8.5
Poland 3.8 3.9 3.5 2.6 3.4 2.7 -3.1 -3.2 -3.7 -7.9 -5.8 -4.7
Hungary 0.8 3.0 3.2 5.0 4.1 3.4 1.5 0.3 -0.4 -3.8 -2.9 -4.0
Czech Republic 2.4 2.3 3.1 1.5 2.1 2.2 -1.5 -1.0 -1.2 -5.2 -4.6 -4.2
Australia 2.7 3.2 3.1 2.8 2.9 3.0 -2.7 -2.7 -4.0 -4.5 -3.5 -2.2
Canada 3.1 2.6 3.2 1.8 2.3 2.4 -3.3 -3.6 -3.4 -3.5 -2.0 -1.7
Asia (ex Japan) 9.4 8.0 7.6 4.6 5.5 4.4 4.0 3.1 2.9 -3.1 -2.8 -2.3
India 9.8 8.2 8.5 9.4 8.2 6.7 -2.6 -3.0 -3.0 -8.5 -7.8 -7.2
China 10.3 9.4 8.6 3.3 5.0 3.5 5.2 4.3 3.8 -2.5 -2.0 -1.5
Latin America 5.9 4.3 3.9 8.9 8.8 7.4 -0.8 -1.5 -2.0 -2.6 -2.5 -2.4
Brazil 7.7 4.2 4.4 5.9 5.8 4.8 -2.3 -2.8 -3.7 -2.6 -2.9 -2.9
EMEA 4.5 4.7 5.1 8.0 7.5 7.1 0.6 -0.5 -1.3 -4.6 -3.4 -2.9
Russia 4.0 5.4 5.5 6.9 9.6 7.2 5.0 3.7 2.0 -3.9 -2.0 -1.7
G7 2.7 2.6 2.9 1.4 1.9 1.8
World 4.8 4.2 4.4 3.2 3.9 3.3
(a) Euroland forecasts as at the last forecast round on 10/12/10. Bold figures signal upward revisions, bold, underlined figures signal downward revisions. (b)
GDP figures refer to working day adjusted data. (c) HICP figures for euro-zone countries and the UK (d) Current account figures for Euro area countries include
intra regional transactions
Forecasts: G7 quarterly GDP growth
% qoq saar/annual: % yoy Q1 10 Q2 10 Q3 10 Q4 10F 2010F Q1 11F Q2 11F Q3 11F Q4 11F 2011F 2012F
US 3.7 1.7 2.6 2.8 2.8 3.8 4.2 4.1 4.3 3.5 3.9
Japan 6.0 2.1 3.3 -1.1 3.9 0.8 3.2 2.5 1.9 1.6 2.2
Euroland 1.5 4.1 1.4 1.2 1.7 1.2 0.9 1.1 1.3 1.4 1.5
Germany 2.6 9.2 2.8 1.5 3.5 3.0 1.1 1.3 1.4 2.5 1.4
France 1.1 2.4 1.0 1.4 1.5 1.0 0.8 1.6 1.5 1.2 1.6
Italy 1.8 1.9 1.1 0.2 1.1 1.0 0.7 0.8 1.4 0.9 1.2
UK 1.3 4.2 2.8 -2.3 1.3 1.3 2.1 2.1 2.0 1.8 2.0
Canada 5.5 2.2 1.8 3.3 3.1 3.4 3.7 3.3 2.1 2.6 3.2
G7 3.5 2.8 2.5 1.4 2.7 2.6 3.0 3.0 2.9 2.6 2.9
Sources: National authorities, DB Global Markets Research
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3. 3 March 2011 Global Economic Perspectives
Oil and the Global Economy: Measured Impact
Over the past six months, oil prices have risen past and most recent movements in oil prices, since the
more than 50%, with more than one-fourth of that effects of an oil price increase will depend importantly on
rise coming in recent weeks as tensions in the what it was that drove prices higher——increases in demand
Middle East have risen. We estimate that most of associated with strong global growth or cutbacks in supply
the rise on oil prices to date (i.e., to a level of associated with disruptions in major producing regions.
about $100/barrel Brent) can be attributed to the The assessment then moves to a survey of various model-
strengthening of aggregate demand in the global based and other empirical estimates of the effects of oil
economy and therefore does not have significant price increases on the growth of real GDP and consumer
negative implications for global growth. prices in major regions of the world. Finally, we provide
quantitative estimates of the effects of the recent rise in oil
If the roughly $10-15/barrel additional increase in
prices and the potential implications of a further run-up in
oil prices in recent weeks that can be attributed to
oil prices that could materialize if oil supplies in the Middle
concerns about possible disruptions to oil
East are significantly disrupted.
production in and distribution from the Middle
East to the rest of the world is sustained, global
growth could be reduced by about ½% this year Chart 1. Oil prices moving higher
$/barrel $/barrel
relative to our current baseline forecast for global 150 Brent WTI 150
growth in the vicinity of 4%.
The risk of a more severe disruption, while not 125 125
high, has risen in the wake of recent events, and
we would put a 10-15% probability on oil prices 100 100
rising to $150/barrel in the near term and
remaining near that for a time. Such a shock 75 75
would reduce global growth by more than 2%,
moving it back into recession territory. The 50 50
positive effects of the shock on inflation would be
somewhat greater in terms of percentage points
25 25
than the negative effect on real GDP. 2006 2007 2008 2009 2010 2011
Countries that are more dependent on imported oil Source: WSJ, DB Global Markets Research
or do not have significant domestic sources of
energy would be hit more than the global average
on impact (Japan and Korea, for example), while Global oil market
those with significant domestic production of
In the past six months, world oil prices have risen by about
energy would be hit less. Everything else equal,
$40/barrel or more than 50% (Chart 1).1 Roughly one-third
industrial countries would be hit less than
of this increase has occurred since the flare-up of tensions
emerging market economies given their greater
in the Middle East began to hit the market a little over a
energy efficiency (lower dependence of output on
month a ago (Chart 2). Before addressing the potential
energy input).
effects of this rise in oil prices on the global economy, it is
useful to review some of the basic features of the global
Introduction
market for oil, including its major demand and supply
Oil prices have been on the rise, and ongoing tensions in features.
the Middle East have again raised questions about the
potential risks to the global economy associated with a Oil continues to be the single most important source of
possible significant disruption of oil supplies. In this week’’s energy in the global economy; it currently accounts for well
GEP we address these questions in a number of over one-third of total primary energy supply. Oil and gas
dimensions. We begin with an overview of the world oil combined account for over 60% of primary energy, and
market, including a breakdown of the major
demanders/users and suppliers/producers of oil. We then
assess the potential effects of a sustained increase or
surge in oil prices on economic activity and prices. This 1
We focus on the Brent price rather than the WTI series because of the
assessment begins with analysis of the extent to which
extent to which the latter price has been artificially depressed in recent
demand factors and supply factors have contributed to weeks by oil pipeline distribution problems in Cusning Oklahoma.
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4. 3 March 2011 Global Economic Perspectives
together with coal, these fossil fuels account for more than about two thirds to roughly half, as their oil usage has
80% of energy (Chart 2). remained relatively stable while that of emerging market
regions has risen strongly (Chart 4). These trends imply
Chart 2. Relative importance of oil in total global that GDP growth in emerging markets, especially Asia,
energy usage have become increasingly important as a driver of world oil
OECD: total primary energy supply demand and therefore oil prices. They also imply that
(2009, 5.2 m toe)
industrial regions of the world have become less sensitive
Combustibe Other
renewables 1.1% to ““oil shocks”” over time as their dependence on oil has
4.4%
Hydro
diminished. To some extent, decreasing oil dependency
Coal
2.1%
19.7% reflects a shift to other sources of energy——natural gas in
Nuclear
11.3%
particular, and here, given the relatively high correlation of
prices across energy sources noted above, exposure to oil
Oil
37.2% shocks may not have declined commensurately.
Chart 4. Global demand for oil by region
Gas
24.2% mln brls per day Global demand for oil by region mln brls per day
100 100
Non OECD Other OECD US: North America Total
Source: IEA, DB Global Markets Research 90 90
80 80
70 70
What has been striking about the energy market in the past
60 60
few years has been the near-perfect synchronization of
50 50
prices of these three major sources of energy (Chart 3).
Whereas historically gas and oil prices have had a 40 40
reasonably high correlation, coal had historically been 30 30
uncorrelated with the other two commodities. But since 20 20
2007 the three prices have clearly moved together. This 10 10
period has seen robust demand for energy of all types. 0 0
And if anything, oil price increases have tended to lead gas 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
and coal price increases since 2007. Source: IEA, OECD and DB Global Markets Research
Chart 3. Prices of oil, gas and coal moving together
However, there is also ample evidence that energy
%y/y, % y/y,
3mma efficiency has increased substantially in response to past
3mma
Oil Coal Gas increases in the relative price of oil and other sources of
225 225
200 200 energy. The World Bank has tracked energy efficiency
175 175 (measured as the amount of energy consumed to produce
150 150
125 125 one unit of real GDP) going back at least 15 years for 125
100 100 economies. It finds that In the United States and Germany,
75 75
50 50 for example, between 1990/91 and 2006/07, real GDP per
25 25 unit of energy consumed has increased by one-third. Gains
0 0 in energy efficiency have not been limited to industrial
-25 -25
-50 -50 countries. In India, the ratio of GDP per unit of energy
-75 -75 consumed has increased more than 50% since 1990/91
00 02 04 06 08 10 and in China it has more than doubled. Interestingly, when
Source: IMF, DB Global Markets Research we measure the major emerging market economies up
against each other, the Latin American economies stand
out as generally achieving a higher real GDP per unit of
energy consumed than economies in the other regions.
Demand EMEA are over-represented at the inefficient right tail but
Demand for oil has been driven increasingly by emerging are well represented in the middle of the range too
market regions. Over the past 15 years, the OECD (Chart 5).
countries’’ share of global oil consumption has fallen from
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5. 3 March 2011 Global Economic Perspectives
Chart 5. Energy efficiency across EM could have a large impact on prices. Because the short-run
GDP/kgoe GDP/kgoe elasticities of demand for and supply of oil are very low,
25 25 relatively small changes in supply from any source in the oil
market can have a large impact on price. Supply may be
20 20 elastic up to a certain point if major producers like Saudi
Arabia are producing short of their full capacity and to the
15 15 extent that consuming countries have built up strategic
petroleum reserves. The International Energy Agency
10 10 estimates that current excess capacity in major producing
regions (primarily Saudi Arabia) are currently more than
5 5 sufficient to replace production by Libya and Algeria if it is
cut off (Chart 6). Thus it is unlikely that events in the Middle
0 0
East will result in a large shock to world oil prices (pushing
them to $150/barrel or more) unless production in Saudi
MEX
PER
COL
ISR
PHL
CHL
HUN
POL
KOR
IND
VEN
IDN
CHN
UKR
HKG
ARG
ZAF
KAZ
LKA
SGP
BRA
ROM
SVK
EGY
CZE
THA
MYS
PAK
VNM
RUS
TUR
Arabia is disrupted.
Source: World Bank and DB Global Markets Research
Chart 6. OPEC spare capacity exceeds Libyan +
Supply Algerian production
Mln brl/day OPEC Libya Algeria Mln Brl/day
On the supply side of the ledger, the Middle East accounts 6.0 6.0
for about 25% of total world oil production, with Saudi
Arabia being the biggest producer at close to 10% of world 5.0 5.0
oil production (Table 1).
4.0 4.0
Table 1. Global supply of oil by region 2010
3.0 3.0
Share in world
Mil B/day 2.0 2.0
supply (2010)
Saudi Arabia 8.2 9.4
Iran, I.R 3.7 4.3 1.0 1.0
Iraq 2.4 2.8
Kuwait 2.3 2.6 0.0 0.0
1994 1996 1998 2000 2002 2004 2006 2008 2010
UAE 2.3 2.6
Source: USDOE/EIA,DB Commodity Research and DB Global Markets
Venezuela 2.3 2.6
Research
Nigeria 2.1 2.4
Angola 1.8 2.1
Libya, SPAJ 1.6 1.8 How oil price shocks affect the economy
Algeria 1.3 1.5
Qatar 0.8 0.9 Whether a rise in oil prices is benign or a threat to global
Ecuador 0.5 0.5 growth depends of course on whether the price increase is
Total Middle East driven by an expansion of demand or a cut in supply. In the
22.6 25.8 former case, higher oil prices reflect a buoyant economy
Countries
Non Middle East OPEC (i.e., are endogenous to economic developments), in the
6.6 7.6
countries latter case they restrict economic activity (i.e., are
Total OPEC 29.2 33.4 exogenous to economic developments). One way to see
OECD 18.9 21.6 whether an oil price increase is endogenous or exogenous
Former Soviet Union 13.6 15.6 is to check whether it precedes or follows changes in
Other non OECD 25.6 29.4 economic activity. Chart 7 shows global GDP growth and
Total World 87.3 100.0
changes in the world market price for oil since the early
Source: OPEC, OECD,IEA and DB Global Markets Research
1970s. Clearly, the oil price spikes of 1974-75 and 1979-80
preceded the change in global growth. Thus, these periods
While the Middle East is not the dominant global producer, are correctly remembered as ““oil price shocks”” triggering
it does account for enough of world production to mean economic downturns. Since then, however, the lead of oil
that a substantial disruption to production in that region price changes over economic growth seems to have
disappeared. Periods of declining growth have tended to
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6. 3 March 2011 Global Economic Perspectives
be followed by periods of falling oil prices, and vice versa, Chart 8. Brent prices and global PMI
suggesting that oil price changes have been endogenous. yoy% Brent crude oil prices (ls) Index
The spike in oil prices in 2007-08 was a bit ambiguous. As 120 Global PMI: composite output (50+ = expansion, rs) 65
the chart shows that spike slightly preceded the slow-
down in economic growth, suggesting some influence 60
80
from rising oil prices on economic activity. However, the
deep recession of 2009 then clearly caused a sharp drop in 55
40
oil prices, while the recovery of 2010 pushed oil prices
50
higher again.
0
45
Chart 7. World GDP and spot oil prices -40
% y/y % y/y 40
World GDP (ls) World spot price for oil(rs)
-80 35
-2.0 200
2001 2003 2005 2007 2009 2011
150 Source: WSJ, JPM, DB Global Markets Research
0.0
100
2.0
50
To what extent is the current level of
4.0
0
prices supply-driven or demand driven?
6.0 As we have noted, before judging how strong an effect a
-50
given move in oil prices is going to have on activity, we
8.0 -100
need to judge whether that move is driven by supply
71 76 81 86 91 96 01 06 11 factors or demand factors. In Chart 9, we plot monthly data
Source: OECD, DB Global Markets Research on yoy changes in real oil prices (deflated by US CPI)
against changes in a world industrial production index. A
key indicator of growth is demand for oil. The estimated
The relationship between oil prices and economic activity relationship indicates that the estimated 7.5% increase in
in the more recent past is explored further in Chart 8, world industrial production over the past year was
which plots changes in oil prices against the global consistent with a 35-40% increase in the price of oil. This
composite purchasing managers’’ index on a monthly basis. would put the price of oil about $25-30 above where it was
Again, the lead of economic activity over oil prices is clearly
a year ago, or in a range of $100-105/bl, compared with its
visible until 2007-08. Developments in 2006-07 suggest
current level of about $110-115/bl (Brent). This suggests
that growth had already begun to weaken when oil prices
started to rise. The acceleration of oil price increases that most of the rise in oil prices over the past can be
towards the end of 2007 and during the first half of 2008 explained by demand factors, and about $10/bbl of the
then seems to have exacerbated the weakening of most recent increase can be attributed to actual or more
economic growth. This changed during the second half of likely anticipated/feared supply disruptions.
2008, when the weakening of economic activity dragged
down oil prices. Recovery during 2009-10 clearly led oil Chart 9. World IP growth and oil prices, 2001-2011
prices higher again, and even the latest round of oil price 100 WTI, %yoy
increases to February 2011 appears to have followed the 80
renewed pick-up of activity. Oil = 5.07 x IP - 2.5
60 R² = 0.51
40
20
0
-20
-40
-60
-80 World IP, %yoy
-15 -10 -5 0 5 10 15
Source: IMF, BLS. Haver, DB Global Markets Research
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7. 3 March 2011 Global Economic Perspectives
To corroborate this finding, we consider the relationship the same effect is observed in export markets. So growth
between the S&P500 stock price index and oil prices. To is likely to slow down by more than the initial impact
the extent that oil prices are impinging on economic assessment –– indeed, even an oil exporting country may
activity rather than respond to it we would expect the ratio find growth slows down despite a positive terms of trade
of stock to oil prices to drop. If strong demand is driving oil shock –– but the impact on inflation is ambiguous. Slower
prices up, the stock price/oil price ratio should be flat to growth means weaker demand for non-oil items, so
rising. This ratio did decline in 2007-08 (Chart 10), headline inflation may rise by less than the initial impact as
confirming our earlier observation that concerns about oil non-oil prices decline.
supply disruptions played a role in the relationship between
To help us sort through these complications we use a
oil and activity during that period——the jump in oil prices did
computational general equilibrium (CGE) model of the
contribute to the drop in growth. More recently, the
world economy calibrated to 2009 levels of activity/prices
stock/oil price ratio has been more stable, edging lower
and so on2 . Such a model is well suited to analyzing a
modestly over the past couple months and a bit more
shock such as an exogenous increase in oil prices,
noticeably in the past few days. This suggests that demand
although the use of a 2009 base year in this particular
factors have dominated the rise in oil prices until very
instance is perhaps unfortunate given how low oil prices
recently.
were then. Unlike VAR analysis, though, this approach
doesn’’t allow us to identify separately the impact and
Chart 10. Ratio of S&P500 to Brent oil price eventual effects of an oil price increase. Instead, we report
Ratio Ratio
in the table below the changes in prices and GDP levels
28 28 after the global economy has returned to equilibrium. We
are cautious about reading too much into the individual
24 24 figures in the tables, but view this exercise at least as
offering a means of ranking economies according to their
20 20 sensitivity to an oil price shock.
16 16
Table 2. Impact on levels of GDP and CPI of a 10% oil
price increase
12 12 Oil Importers
Latest value
for March 1 GDP CPI GDP CPI
Chile -0.33 0.69 Philippines -0.23 0.66
8 8
2006 2007 2008 2009 2010 2011 China -0.27 0.46 Poland -0.41 0.64
Chech Rep -0.41 0.68 Singapore -0.25 0.44
Source: WSJ, DB Global Markets Research
France -0.62 0.71 S. Africa -0.29 0.7
Germany -0.43 0.65 S.Korea -0.69 0.57
HK -0.11 0.48 Spain -0.41 0.66
Empirical estimates of the effects of oil Hungary -0.31 0.6 Taiwan -0.53 0.46
price shocks on the global economy. India -0.52 0.01 Thailand -0.56 0.48
Italy -0.34 1.08 Turkey -0.46 0.58
We consider a variety of model-based estimates, including Japan -0.29 0.73 U.K -0.72 0.53
two done in-house (CGE and VAR models) and several by Netherlands -0.72 0.49 U.S -0.49 0.45
external research groups (the IMF, OECD, and Fed). We Oceania -0.35 0.6
then derive a ““consensus”” measure to be used in the Oil Exporters
sensitivity analysis that follows. GDP CPI GDP CPI
Argentina -0.44 0.59 Malaysia -0.49 1.05
CGE model-based estimates Brazil -0.69 0.62 Mexico -0.32 0.77
Other
Figuring out how higher oil prices impact an economy cries Colombia -0.71 0.98 MENA -0.22 0.82
Egypt 0.38 0.34 Peru -0.51 0.62
out for a general equilibrium approach because beyond the
Indonesia -0.26 0.55 Russia -0.26 0.9
immediate impact of oil prices on headline inflation and
Iran -0.34 1.08 Venezuela -0.15 0.87
energy demand the ““second round”” effects quickly Source: DB Global Markets Research
become too difficult to sort out as many of these effects
operate in conflicting directions. For a small open
economy, for example, an increase in the world price of oil
may be genuinely a supply shock, pushing up headline
inflation and reducing demand for oil. But the latter will 2
Our CGE model is a modified version of the Purdue University GTAP
tend to depress activity as will a decline in export growth if model.
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8. 3 March 2011 Global Economic Perspectives
What is interesting about the results is how similar they are Other model simulations
across regions. Of particular importance, while oil
Extensive work has been done by the IMF and OECD on
exporters see a rise in their trade surpluses (not reported)
capturing the impact of oil price shocks on GDP and
and importers generally experience a decline, by the time
inflation of US and Euro Area. The Fed, too has reported
all the second- and third-round effects are worked out,
simulations for the US economy with its FRB-US model.
most countries don’’t differ too much. On average, real
The results of this work, standardized to capture the
GDP falls by about 0.4% -- slightly less for the exporters,
effects of a $10 per barrel increase in oil prices, are
only slightly more for the importers. Only one oil exporter
summarized in Table 3A and 3B. We have also added a
–– Egypt –– is estimated to enjoy an increase in GDP,
““consensus”” estimate, which is our own judgmentally
although Venezuela, possibly the most oil dependent
weighted average of the various model results, giving
economy in this sample –– experiences only a very mild
some weight to the CGE results discussed above.
reduction in output. But the message is that even for oil
exporting countries, the impact of weaker global demand Table 3A. Impact on GDP growth due to rise in oil prices by
growth after an oil price shock generally more than offsets $10 per barrel
the initial gains. OECD- IMF-
Interlink FRB/US Mulitmod DB VAR Consen-
There is more variance across countries in terms of the
model (1999) Model (2011) sus
impact on inflation. While the average increase in inflation
(2004-05) (2000)
for the countries we present above is 0.6%, oil exporters
are estimated to see relatively higher price level increases US -0.3 -0.2 -0.6 -0.4 -0.35
than the importers –– where the dampening effect on
Euro Area -0.5 -0.4 -0.5
growth is stronger.
The model suggests that the developed economies are Japan -0.4 -0.2 -0.3
slightly worse off after an oil price shock than emerging Total
markets. The former group would see a larger drop in GDP Developing -0.2 -0.2
and a slightly larger increase in inflation than the oil- countries
importing emerging market economies would on average, Asia ex
-0.8 -0.8
although the group-wise differences are not large. Japan
Between the US and Europe, the simulation suggests that World -0.4 -0.4
the biggest difference will be on the inflation front, with
Source: OECD, FRB, DB Global Markets Research
more inflation in Europe than the US after an oil shock.
We are surprised at the relative resilience of growth in
Hong Kong and Singapore that falls out of the simulations ––
the other ““high beta”” Asian oil importers do see a larger
Table 3B. Impact on inflation due to rise in oil prices by $10
GDP drop than in the developed economies, as we’’d
per barrel
expect.
OECD- IMF-
Interlink FRB/US Mulitmod DB VAR Consen-
VAR model-based estimates model (1999) Model (2011) sus
(2004-05) (2000)
We have also used a VAR (vector autoregression) model to
gauge the impact of changes in oil prices on the US real US 0.5 0.5 0.6 0.5 0.5
GDP growth and consumer price inflation. The model
Euro Area 0.5 0.2 0.4
incorporates two lags on the quarterly annualized growth
rates for each of these variables. The impulse response to Japan 0.3 0.3
a one standard deviation shock to oil price growth shows
Total
an immediate fall in real GDP growth by about -0.4 to -
Developing
0.5% while the consumer price inflation rise by about 0.4
countries
to 0.5%. The accumulated responses for GDP growth and
Asia ex
inflation over a period of 10 quarters are -1.8% and 2.2%. 0.7 0.7
Japan
These results, when translated into $10 rise in oil prices,
imply a reduction in real growth rate by about 0.2% World
immediately and 0.6% over a period of 10 quarters. Source: OECD, FRB, DB Global Markets Research
Inflation rises by 0.2% and 0.7% for a $10 rise in oil prices
during the same periods.
Page 8 Deutsche Bank Securities Inc.

9. 3 March 2011 Global Economic Perspectives
Effects of mild and severe oil price have made the global economy less sensitive than in
shocks the past. But the increasing importance of emerging
market economies to the global GDP picture and
Using the consensus estimates in Tables 3A and B, we can their lower energy efficiency would have tended to
consider the possible effects of two alternative scenarios go the other way and increase sensitivity somewhat.
involving disruption of Middle East oil supplies. The first is
a mild disruption that entails holding the Brent price in the
range of 110 to 115/brl for much of the year ahead. In this Peter Hooper, (+1) 212 250-7352
case, we see US, Euro area and global growth slowing by
Thomas Mayer, (49) 69 910 30800
about 0.4 to 0.5% relative to our baseline forecast. The
second scenario entails a more severe disruption of output,
Michael Spencer, (852) 2203 8305
with unrest spreading meaningfully to Saudi Arabia and/or
other major Middle Eastern producers by enough to push Torsten Slok, (+1) 212 250-2155
the Brent oil price up to $150 per barrel until global growth
responds negatively. In this case, the hit to global growth
would be five times as large as in the mild shock case,
enough to reduce global growth to near recession levels
(less than 2%).
Table 4. Impact of oil price shocks on GDP growth and
inflation for year ahead
Mild oil shock Severe oil shock
Oil prices to stay at Oil prices reach
$110/brl $150/brl
GDP Inflation GDP Inflation
US -0.35 0.5 -1.75 2.6
Euro Area -0.5 0.4 -2.3 1.8
Japan -0.3 0.3 -1.5 1.5
Total
Developing -0.2 -1.0
countries
Asia ex
-0.8 0.7 -4.0 3.5
Japan
World -0.4 -2.0
Source: DB Global Markets Research
Our estimate that a 50% supply-induced oil price shock
would cut roughly 2 to 2.5% points off global growth
allows for an interesting historical comparison with
past supply-induced shocks. Oil prices jumped
nearly 200% in 1973-75, and global growth dropped
by 6% points. In 1979-80, a 67% jump in oil prices
resulted in nearly a 4% point drop in olobal growth.
Thus our current estimate is not too far out of line
with this earlier experience. Increases in energy
efficiency and reduced dependence on oil per unit of
output, especially among industrial countries, would
Deutsche Bank Securities Inc. Page 9

10. 3 March 2011 Global Economic Perspectives
Central Bank Watch Euroland
We expect the ECB to leave policy rates unchanged at the
US next Council meeting on March 3. We expect more
The Fed's stated intention is to purchase $600 bn of hawkishness but also insistence that there is ““no
longer-term US Treasury securities by June under QE2. precommitment”” to hikes. In our opinion, the most likely
We expect that intention to be fulfilled and not extended occasion for the first hike is June. We see May as the
beyond this commitment unless the economy takes a earliest possible date for a hike where we expect a more
significant turn for the worse. The improving US definitive decision on March 3 is on the non-standard
economic picture suggests that once QE2 terminates, the liquidity policies. Against the prevailing uncertainties (e.g.,
Fed will likely turn next to ending the MBS rollover Spanish bank refinancing in the next few months, EFSF
program later this summer or fall. It will likely also begin reforms, Irish and EU bank stress tests) we expect the
to modify its "extended period" language sometime during ECB to leave the full allotment regime intact.
that time frame, signaling that the initial rate hike will Current Mar11 Jun 11 Dec 11
follow within several meetings. With economic news Refi rate 1.00 1.00 1.25 1.75
improving, we see a good chance of an initial hike in
policy rates occurring around the end of 2011--our US Key rates in the G3 countries
economics team's call has been for this December. Prior % K ey rates in th e G 3 co u n tries %
to hiking rates, the Fed will most likely engage in reverse 7
BoJ
7
repo operations and term deposits to reduce the liquidity 6 E C B refi F orecast 6
Fed Funds
of its liabilities. And it should begin to sell off some of its 5 5
holdings of MBS and Treasury securities after it has begun 4 4
to raise policy rates. How quickly it proceeds in raising 3 3
rates and selling its holdings of longer-term assets will
2 2
depend on how the markets and the economy are
1 1
responding to this shift toward policy tightening. But on
our current growth and inflation forecast, and the Fed’’s, 0 0
1999 2001 2003 2005 2007 2009 2011
we think that tightening could proceed somewhat faster Source: DB Global Markets Research, Bloomberg Finance LP
than the market currently has priced in for 2012.
Current Mar11 Jun11 Dec11
UK
fed funds rate 0 - 0.25 0 - 0.25 0 - 0.25 0.50
The minutes of the last MPC meeting show that three of
Japan the nine committee members are now voting for rate
Had there been a severe slump in the economy in 4Q hikes, with Andrew Sentence voting for 50bp; Adam
2010 and 1Q 2011, the BoJ may have been forced to Posen continues to support additional QE. Among the five
enact further monetary easing purely from the business members voting for the status quo, there are ““some””
cycle viewpoint but it seems reasonable to consider that who worry about inflation developments but want to be
the decline in economic activity now assumed likely has sure the Q4 GDP contraction is an aberration before
effectively eliminated the possibility of further monetary taking action. Q1 GDP will be available by the time of the
easing. After a temporary increase in the current account May MPC meeting. We still see risks of a delay on the
balance of commercial banks with the BoJ (bank reserves) first hike until August.
to ¥22trn to satisfy year-end rise in demand for funds Current Mar11 Jun 11 Dec 11
(Figure 12), we expect the bank reserves to settle at Bank rate 0.50 0.50 0.50 1.00
around the ¥18trn level once again in January 2011.The
Sweden
BoJ started the purchase of ¥5trn worth of financial
The Riksbank raised rates from 1.25% to 1.50% at its
assets proposed in the 5 October 2010 ““Comprehensive
February meeting, as the market expected. The next
Monetary Easing”” (¥1.5trn long-term government
meeting is on 20th April.
securities, ¥2trn short-term Treasury bills, ¥500bn
CPs,¥500bn corporate bonds, ¥450bn ETFs, and ¥50bn Current Mar11 Jun 11 Dec 11
REITs) but we are not certain that the total amount will Repo rate 1.50 1.50 2.00 2.50
definitely lead to an increase in BoJ total assets by the
same magnitude.
Current Mar11 Sep11
ON rate 0 - 0.10 0.10 0.10
Page 10 Deutsche Bank Securities Inc.

11. 3 March 2011 Global Economic Perspectives
Current Mar11 Jun11 Dec11
Central Bank Watch (continued) OC rate 4.75 4.75 5.00 5.50
Switzerland New Zealand
The SNB left policy rates unchanged in December. While higher prices for energy, food and other raw materials
the economy has performed better than expected, we see probably explain an increase in both the number of firms
the franc continuing to limit the rise in core inflation. The intending to rise selling prices (up 4pts to +26) and a rise
next meeting is on 17 March. in surveyed inflation expectations (up 0.18bps to 3.02%).
Current Mar11 Jun 11 Dec 11 Whilst the latter will not be welcomed by the RBNZ, we
3M Libor tgt 0.25 0.25 0.50 1.00 do not expect this to be an obstacle to an easing of the
OCR when the Bank formally reviews policy settings on
Key rates in the peripheral European countries 10 March. A rate hike could occur marginally earlier
% Switzerland 3m interbank rate %
7 UK repo rate 7
(perhaps in July) if the economy and/or underlying inflation
Sweden repo rate Forecast strengthens considerably more than we presently expect
6 6
or be delayed beyond September if the economy fails to
5 5
gather pace over coming months. Whilst clearly not on
4 4 the table at present, in the near term we think the only
3 3
conceivable change is a wind-back of the rate hikes
implemented last year should signs emerge that the
2 2
economy is set to continue a sideways crawl of the
1 1
second half of 2010 for a significant part of 2011.
0 0
1999 2001 2003 2005 2007 2009 2011 Current Mar11 Jun11 Dec11
Source: DB Global Markets Research, Bloomberg Finance LP OC rate 3.00 2.50 2.50 2.50
Canada Key rates in the Peripheral $-bloc
The Bank of Canada left its target for the overnight rate % Official interest rates (cash rates) %
unchanged at 1% today as expected. Policy Rate
9 9
New Zealand Australia Canada
announcement is considerably more dovish that we
8 8
7 7
expected given the strong pattern of full time job growth
6 6
over the past six months, the stronger than expected (by
5 5
the Bank) growth of GDP in the fourth quarter of 2010 and 4 4
the evidence of stronger inflationary expectations noted in 3 3
the most recent BoC Business Outlook Survey. Looking 2 2
forward, it is still possible that the Bank will begin to 1
Forecast
1
tighten at its April 15 Policy Rate Announcement. 0 0
However, the emphasis on downside risks in this Policy 1999 2001 2003 2005 2007 2009 2011
Source: DB Global Markets Research, Bloomberg Finance LP
Rate Announcement makes it unlikely it will do so. This
being said, given sustained growth of US/global economic China
activity, persisting strength of domestic demand in China's official CPI inflation came in at 4.9% yoy in
Canada, a further intensification of domestic inflationary January, up from 4.6% in December but significantly
below market and our expectations of 5.3-5.4%. The
expectations and an abatement of concerns regarding the
widely speculated reason for this lower-than-expected
risk of an oil shock, it appears more likely that the Bank
figure -- the government adjustment to the CPI weights --
will adopt a more restrictive policy stance in late May. was incorrect. The main surprises were that the official
Current Mar11 Jun11 Dec11 mom increase in food prices (at 2.8%) was significantly
ON rate 1.00 1.00 1.50 2.25 lower than our expectation of 3.7% (based on 6.2% mom
rise in the agriculture price index in January, as reported
Australia
by the Ministry of Agriculture), and that clothing prices fell
With a positive global and domestic backdrop, RBA views
in Jan (which is difficult to explain, after a 86% rise in
the monetary stance in Australia as mildly restrictive and
cotton prices last year). We believe that Feb food price
look for inflation to be consistent with the 2-3% target
inflation in the official CPI statistics will likely surprise on
over the year aheadWe therefore see nothing in the
the upside, as the pass-through from agriculture prices to
statement to suggest that the Bank is contemplating any
processed food prices are being delayed. We maintain our
near-term change in policy. Hence, even though our year-
annual average CPI inflation forecast of 5%, and continue
end cash rate target of 5.50% is likely (in our assessment)
to expect yoy inflation to peak in June (at 5.8%yoy
to be at the relatively hawkish end of views, we continue
according to our latest forecast, vs the previous 6%). For
to struggle to see the Bank tightening again before mid-
the second half of this year, we expect CPI inflation to fall
year (i.e. June / July).
Deutsche Bank Securities Inc. Page 11

12. 3 March 2011 Global Economic Perspectives
would complement the increase in interest rates, implying
Central Bank Watch (continued) that they could help reduce the magnitude of the
tightening cycle. We expect two additional 50bp hikes in
gradually towards 4% at the end of the year. The key March and in April, although the sharp deterioration in
assumptions behind this projection include a 3% inflation expectations has increased the likelihood of a
cumulative decline in mom food prices in March-May, a longer cycle.
stable global oil price, a stable velocity of money, and
limited pass-through of raw materials and wage inflation Current Mar11 Jun11 Dec11
to consumer prices. CBR refi rate 11.25 11.75 12.25 12.25
Current Mar11 Jun11 Dec11 Russia
1-year rate 3.00 3.20 3.50 3.50 Most recently, the CBR declared that it would hike
interest rates across the spectrum of its instruments of
India monetary policy. Starting from the last day of February,
Stressing that ““inflation is clearly the dominant concern,”” the refinancing rate, the key benchmark rate of the
the Reserve Bank of India resumed monetary policy Russian money market, is be set at 8% - 25bps above its
tightening in its January review, raising the repo and current value of 7.75%. Overnight deposit rates were
reverse repo rates to 6.5% and 5.5%, respectively. Apart hiked 25bp from 2.75% to 3% and overnight credit rates
from elevated food and fuel inflation risks, the central reached 8%.
bank sees emerging demand side risk to inflation as well. Separately, reserve requirements were raised on Friday
The output gap has been closing, wage growth is robust, from 3.5% to 4.5% in foreign currency and from 3% to
and public social spending programs are boosting income 3.5% in local currency. We note that this is the second
of the rural poor. Given these risks, the central bank time (the first one was at the end of January), when the
revised up its inflation forecast for March 2011 to 7% CBR raises reserve requirements in foreign currency
(from 5.5%), lower than our projection of 8%. It also together with local currency reserve requirements. We
recognized that the risk to the forecast was to the upside. link these hawkish actions by the CBR with the still high
Curiously, the RBI statement did not entertain the inflation inflation levels, which reached 2.4% in January and 0.7%
trajectory beyond March. Incorporating the risks thus far in February.
highlighted by the central bank, we see inflation remaining The high levels of inflation observed in February were
around 8% through the course of the year. [January observed despite the significant reduction in fuel prices,
inflation print of 8.2% further reinforces our concerns]. which suggests that the in-built inflationary momentum
The RBI justified the rate hikes by arguing that the growth- remains substantial. Furthermore, we note that the CBR
inflation balance of risk has tilted toward the opted to raise rates in spite of the disappointing growth
intensification of inflation. We see the RBI remaining open figures for January, which suggests that inflation concerns
to further rate hikes, especially as we see no major respite have taken on prime importance for the monetary
from inflation pressure in the coming months. The central authorities.
bank also seems ready to allow for some growth to be As for inflation prospects later this year, Deutsche Bank
sacrificed, if necessary, in its fight on inflation. If the non- forecasts the oil prices to remain high in 2011, averaging
core to core price spillover begins, which seems rather at USD101/bbl for Brent. We think that with oil prices at
likely in our view, the central bank will have no choice but such a high level, the government’’s forecast (and the
to act. We expect 100 more basis points in rate hikes CBR’’s target) of 6-7% CPI inflation in 2011 will be hardly
during 2011. achievable. We currently forecast the inflation to reach
Current Mar11 Sep11 Dec11 8.5% in 2011.
Repo rate 6.50 6.75 7.50 7.50 Current Mar11 Sep11 Dec
CBR refi rate 8.00 8.25 8.25 8.00
Brazil Key rates in major emerging markets
The Central Bank initiated a new tightening cycle in %
B razil C hina India
%
January, raising the SELIC overnight rate by 50bp to 30 30
11.25%. The increase in interest rates was inevitable 25 F orecast 25
given the strength of domestic demand and sharp 20 20
deterioration in inflation expectations. Market participants
currently expect inflation to surpass the 4.5% target in 15 15
2011 and 2012. The official statement released by the 10 10
Central Bank explained that the hike in the SELIC rate was 5 5
the ““beginning of a process of adjustment,”” indicating
that it planned to implement additional hikes. At the same 0
2002 2004 2006 2008 2010
0
time, however, the Central Bank stated that ““macro- Source: DB Global Markets Research, Bloomberg Finance LP
prudential measures”” (such as the increase in reserve
requirements on bank deposits announced in December)
Page 12 Deutsche Bank Securities Inc.

13. 3 March 2011 Global Economic Perspectives
G loba l c ent r a l ba nk polic y r a t e hikes s inc e S ept em ber 2008
Trough 2009 2010 2011 Total bps
policy rate Aug Oct Nov Dec Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb hike
Israel 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 200
Australia 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% 4.75% 175
Norway 1.25% 1.50% 1.75% 2.00% 75
Vietnam 7.00% 8.00% 9.00% 11.00% 400
Malaysia 2.00% 2.25% 2.50% 2.75% 75
India 4.75% 5.00% 5.25% 5.75% 6.00% 6.25% 6.50% 175
Brazil 8.75% 9.50% 10.25% 10.75% 11.25% 250
Peru 1.25% 1.50% 1.75% 2.00% 2.50% 3.00% 3.25% 3.50% 225
Canada 0.25% 0.50% 0.75% 1.00% 75
Chile 0.50% 1.00% 1.50% 2.00% 2.50% 2.75% 3.00% 3.25% 3.50% 300
New Zealand 2.50% 2.75% 3.00% 50
Taiwan 1.25% 1.38% 1.50% 1.63% 38
Sweden 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 125
S Korea 2.00% 2.25% 2.50% 2.75% 75
Thailand 1.25% 1.50% 1.75% 2.00% 2.25% 100
Serbia 8.00% 8.50% 9.00% 9.50% 10.50% 11.50% 12.00% 400
Uruguay 6.25% 6.50% 25
Nigeria 6.00% 6.25% 6.50% 50
China 2.25% 2.50% 2.75% 3.00% 75
Hungary 5.25% 5.50% 5.75% 6.00% 75
Poland 3.50% 3.75% 25
Indonesia 6.50% 6.75% 25
Colombia 3.00% 3.25% 25
Russia 7.75% 8.00% 25
Note: Reserve Bank of India hiked twice in July, each by 25bps
Deutsche Bank Securities Inc. Page 13

14. 3 March 2011 Global Economic Perspectives
Global data monitor: Recent developments and near-term forecasts
B’’bergcode Q1-10 Q2-10 Q3-10 Q4-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11
OECD leading indicators
(6M change, %, ann.)
OECD 10.1 8.2 4.1 1.4 2.0 1.4 0.9
US OLEDUSA 11.2 9.9 5.3 2.5 3.2 2.5 1.9
Euro area OLEDEU12 9.6 6.9 2.4 -0.4 0.3 -0.4 -0.9
Japan OLEDJAPN 7.4 7.6 4.7 2.5 3.0 2.4 2.0
China OLEDCHIN 23.7 17.6 12.4 10.8 11.2 10.8 10.3
India OLEDINDI 14.8 11.4 8.9 6.5 7.4 6.5 5.7
Russia OLEDRUSS 15.9 14.4 10.6 8.8 9.1 8.8 8.5
Brazil OLEDBRAZ 20.8 13.3 5.5 2.7 3.2 2.6 2.4
Purchasing manager indices
Global (manufacturing) 56.0 56.4 54.3 55.4 54.9 55.2 56.2 57.4
US (manufacturing ISM) NAPMPMI 58.6 57.6 55.2 57.9 56.9 58.2 58.5 60.8 62.0
Euro area (composite) 54.4 56.6 55.7 55.0 53.8 55.5 55.5 57.0 58.4 f
Japan (manufacturing) SEASPMI 52.5 54.1 50.8 47.6 47.2 47.3 48.3 51.4 52.9
China (manufacturing) EC11CHPM 56.7 52.8 51.4 54.8 54.8 55.3 54.4 54.5 51.7
India (manufacturing) 58.0 57.8 56.6 57.4 57.2 58.4 56.7 56.8 57.9
Russia (manufacturing) 50.4 52.2 52.3 52.2 51.8 51.1 53.5 53.5 55.2
Other business surveys
US dur. goods orders (%pop1) DGNOCHNG 1.8 0.7 1.8 -1.2 -3.1 -0.1 -0.4 2.7
Japanese Tankan (LI) JNTSMFG -14.0 1.0 8.0 5.0
Euro area EC sentiment EUESEMU 96.4 99.1 102.2 105.6 104.3 105.6 106.9 106.8 107.8
Industrial production (%pop1)
US IP CHNG 7.2 7.1 6.4 3.0 -0.1 0.3 1.2 -0.1 0.6
Euro area EUITEMUM 9.8 9.9 4.4 6.9 0.8 1.4 -0.1
Japan JNIPMOM 30.9 6.2 -7.1 -6.1 -2.0 1.0 3.3 2.4
Retail sales (%pop1)
US RSTAMOM 8.9 5.0 3.3 13.7 1.6 0.8 0.5 0.3 1.0
Euro area RSSAEMUM 1.9 0.1 1.4 -1.7 0.0 -0.1 -0.6
Japan (household spending) 1.5 -6.4 6.0 -6.3 -0.8 0.2 -2.4 1.0
Labour market
US non-farm payrolls2 NFP TCH 39 181 -46 128 171 93 121 36 250
Euro area unemployment (%) UMRTEMU 9.9 10.0 10.0 10.0 10.1 10.0 10.0 9.9
Japanese unemployment (%) JNUE 5.1 5.1 5.0 5.0 5.1 5.1 4.9 4.9
CP inflation (%yoy)
US CPICHNG 2.4 1.8 1.2 1.3 1.2 1.1 1.5 1.6
Euro area ECCPEMUY 1.1 1.6 1.7 2.0 1.9 1.9 2.2 2.3 2.5
Japan JNCPIYOY -1.2 -0.9 -0.8 0.1 0.2 0.1 0.0 0.0
China CNCPIYOY 2.1 2.7 3.3 4.7 4.3 5.2 4.8 5.1
India 9.4 10.6 9.3 8.3 8.7 8.1 8.3 8.1
Russia RUCPIYOY 7.2 5.9 6.1 8.1 7.5 8.1 8.8 9.6
Brazil 4.9 5.1 4.6 5.6 5.2 5.6 5.9 6.0
Current account (USD bn)3
US (trade balance, g+s) USTBTOT -38.0 -44.2 -44.7 -39.1 -38.3 -38.3 -40.6 -41.0
Euro area -0.8 -2.8 -6.2 -15.1 -13.3 -14.3 -17.6
Japan 17.1 13.7 17.2 16.8 17.9 13.9 18.7
China (trade in goods) 11.1 15.9 19.3 14.2 15.0 13.7 13.9 5.4
Russia (trade in goods) 16.0 12.7 9.5 13.1 11.5 12.7 15.0
Other indicators
Oil prices (Brent, USD/b) EUCRBRDT 76.3 78.3 77.6 87.2 83.7 85.9 92.1 97.7 103.1
FX reserves China (USD bn) CNGFOREX 2447.1 2454.3 2648.3 2847.3 2760.9 2767.8 2847.3
Quarterly data in shaded areas are quarter-to-date. Monthly data in the shaded areas are forecasts.
(1) % pop = % change this period over previous period. Quarter on quarter growth rates is annualised.
(2) pop change in ‘‘000, quarterly data are averages of monthly changes.
(3) Quarterly data are averages of monthly balances.
(4) ‘‘f’’ stands for flash estimate.
Sources: Bloomberg Finance LP, Reuters, Eurostat, European Commission, OECD, Bank of Japan, National statistical offices.
Page 14 Deutsche Bank Securities Inc.