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מבט לכלכלה העולמית – התאוששות לא אחידה


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מבט לכלכלה העולמית – התאוששות לא אחידה

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מבט לכלכלה העולמית – התאוששות לא אחידה

  1. 1. The Global Economic Outlook: An Uneven Recovery? Carlos A. Primo Braga Special Representative and Director for Europe, External Affairs Vice- Presidency, The World Bank Presentation at the Università di Pavia/Istituto Universitario di Studi Superiori/Collegio Santa Caterina da Siena November 25, 2011 The views expressed here are those of the author and do not necessarily reflct the v e s o the W r l d B e i w f o ank, o thos e o its E r f xecu ve Dir e ors or ct the governments they represent.PDF created with pdfFactory trial version
  2. 2. “Theory is when you understand everything, but nothing works. Prac ce is w en e yt hi n w r ks, b n h ver g o ut obody u nder stands w y. h At this sta o theor y a p ac ce are un t e so no hi ng wr ks an no n, nd r i d, t o d body understands why.” (Source: Fisher, 2011)PDF created with pdfFactory trial version
  3. 3. What is the global economic outlook? A mix of good and bad news… • Commodity prices increase has moderated and infl on y press ures are do a ar wn • Japanese recovery is proceeding well • Emerging markets growth remains strong (and developing countries are expected to grow between 5.6 and 4.7% in 2012) BUT • Eurozone strains have increased • Poli cal u ncer tai n y a t bout U b S udget d scus si o i ns • Weaker underlying growth momentum in High Income Countries (2012 forecasts between 1.8 and 1.1% versus 2.2% forecast of mid-year) • Major global stock market correc o (m r e than $ tri llio si n Jul y n o 5 n ce ) • Even though developing countries fundamentals remain strong, contagion is genera n si g fi nt he i n d an mj or ca t a o l ow g ni ca adw s d a pi l u s • Moreover, developing countries have now a more restricted fi space scal compared to 2008 In short: downside risks have increasedPDF created with pdfFactory trial version
  4. 4. Commodity prices have stabilized or are falling Sources: Datastream and World Bank DEC Prospects GroupPDF created with pdfFactory trial version
  5. 5. PDF created with pdfFactory trial version
  6. 6. Impact of Japan disaster is fading Car produc o n 12-month percent change, number of units produced Note: 2011 Source: OECD/Toyota Motor Corpora o a H nda M t or C L m nt hl y repor ts. n nd o o o. td oPDF created with pdfFactory trial version
  7. 7. 2011 GDP compares well with 2007, in most cases • For example, GDP is below its 2007 level in only 8 out of 30 ECA countries Devia o o 2 ns f 011 real G from the 2 DP 007 le vel 40 % change from 2007 30 20 10 0 -10 -20 IND HRV SRB FRA ITA LTU EST TJK MEX TKM BLR POL KOR TUR ROM ARM KAZ RUS BIH AZE KSV GEO MKD MNE CZE CHN UZB ALB BRA MDA CAN USA SVN HUN JPN LVA DEU SVK BGR GBR UKR KGZPDF created with pdfFactory trial version
  8. 8. BUT…PDF created with pdfFactory trial version
  9. 9. The Outlook According to the IMF WEO Real GDP Growth Projec o ns (percent change from a year earlier) World U.S. Euro area Japan Brazil Russia India China 2011 4 1.5 1.6 -0.5 3.8 4.3 7.8 9.5 (Sept 2011) 2011 (Jun 2011) 4.3 2.5 2.0 -0.7 4.1 4.8 8.2 9.6 2011 (Apr 2011) 4.4 2.8 1.6 1.4 4.5 4.8 8.2 9.6 2012 (Sept 2011) 4 1.8 1.1 2.3 3.6 4.1 7.5 9 2012 (Jun 2011) 4.5 2.7 1.7 2.9 3.6 4.5 7.8 9.5 2012 (Apr 2011) 4.5 2.9 1.8 2.1 4.1 4.5 7.8 9.5 Source: IMF, World Economic Outlook.PDF created with pdfFactory trial version
  10. 10. Forecasts have been downgraded further since September Projected growth Source: World Bank DEC Prospects GroupPDF created with pdfFactory trial version
  11. 11. Eurozone fianc i n 1 g n g: 0y over nm nt be onds yields (sources: Bloomberg and RGE)PDF created with pdfFactory trial version
  12. 12. Con t a g i o n ha s i n c r e a s e d so v e r e i g n c r e d i t de f a u l t swap r a t e s wo r l dw i d e Change i n 5- y ea r s o v e r e i g n c r e d i t - d e f a u l t swap , ba s i s po i n t s ( as o f Oc t .31 s t )* H i g h - i n c ome Deve l o p i n g co un t r i e s coun t r i e s * Change s i n c e t h e beg i n n i n g o f J u l y . Sou r c e s : B l o ombe r g and Wo r l d Ban k DEC P r o s p e c t s G r o u pPDF created with pdfFactory trial version
  13. 13. European banking-sector counterparty-risk concerns persist despite pledge to recapitalize Interbank overnight spreads, basis points United States (LIBOR-OIS spread) Europe (EURIBOR-EONIA spread) (Latest reading, 88.1) Sou r c e s : Da t a s t r e am and Wo r l d Bank DEC P r o s p e c t s G r o u p 13PDF created with pdfFactory trial version
  14. 14. Market percep o a p i ca tu oi l a ns nd ol l rm re impac n the real -si d o the w r l d e g e f o conom y • Change in mood about recent growth performance – Data revisions (for high-income countries) – Weaker than an ci p ed second q ter res ul ts at uar • Financial market turmoil reflcts b h d sappoi n ng ( b kw d- e ot i ac ar looking) economic news and growing (forward-looking) fears (sovereign debt concerns, perceived lack of poli c cons ens us o al n how to address economic problems…) • Increased uncertainty and shaken confienc e m y d p en d a am investment and increase precau o y savi n nar gsPDF created with pdfFactory trial version
  15. 15. Impact on developing countries can be significant if further deteriora o o e n f conom c condi on i nhigh i s - income countries materializes • Direct fianc i a channel p en all yi m r t ant fo La n n l ot p o r America & Caribbean and Europe & Central Asia regions (due to integrated bank ownership) • Implica o fo w r l d trade n tri v a ns r o on- i l • Should wealth eff ects a confidnce be aff nd e ected m ore markedly than growth could be weaker by two percent or more • If fianc i a -sector sol v n l ency is a ed or a mr ket - i nuc ed ffect a d credit event occurs more serious consequences could be envisagedPDF created with pdfFactory trial version
  16. 16. Fiscal space: 42% of developing countries have a government defi t g eat er than 4 o G in 2 ci r % f DP 010, versus only 18% in 2007 Source: World Bank DEC Prospects GroupPDF created with pdfFactory trial version
  17. 17. The “elephant” in the roomPDF created with pdfFactory trial version
  18. 18. The implica o o the E opean sover ei g ns f ur n debt crisis • Signs of contagion with CDS spreads rising even in some core Euro Area countries • Banking-sector exposure to European sovereign debt is an issue of concern • Markets remain uncertain about commitment to adjustment; lack of consensus on the role of the ECB; moreover, the current debt overhang plus fi /finnci al im l an scal a ba ces, ad l im a ons ont he us e of e hange- n it xc rate policy constrain growth prospects • Uncertainty can transform temporary liquidity problems into solvency crises… • Sovereign debt crises: history suggests that growth (unlikely in the near future…), fiscal a u tm nt (gr owi n p i ca re stance… , ina o (t he dj s e g ol l si ) fl n experience of the 1920s vs the reality of the 2010s), debt restructuring (fianc i a e n i n a real d n l ngi eer g nd ebt rel ie … a fia al re ess i on are f ) nd nnci pr some of the usual channels to cope with unsustainable debt/GDP ra o sPDF created with pdfFactory trial version
  19. 19. The trade channel: MENA, ECA and SSA have the closest e to h g spr ead E opean e s i h- ur conom e i s Percent of merchandise exports des n to E ope ed ur 9.5 16.3 7.3 6.2 4.2 4.8PDF created with pdfFactory trial version
  20. 20. Arab spring events have affected in tm nt , ves e economic ac v ty a la i nd bor m r ket s a Industrial produc o (% change, 3 / 3m seasonal ly a u ted a n m , dj s nnual ized rat es ) Source: World Bank based on data from Datastream Tourist arrivals (% change over same Unemployment rates (%) period last year) Source: UNWTO. Source: Government sta s cs.PDF created with pdfFactory trial version
  21. 21. Growth and unemployment Growth accelerated in response to reforms but not enough to address the key challenges facing the region (average, The MENA region has the highest youth unemployment rate in annual growth rates in %) the world (%) 40 9 8 35 7 30 6 5 25 4 20 3 1990-99 15 2 1 2000-08 10 0 5 -1 -2 0 North Middle SA LAC World Sub South East Africa East Saharan Asia Asia Africa MENA has the lowest par c p on r a ad also am g i a te, n on The young popula o h b n as een soar i n in M NA g E women (% of working age popula o n) EAP SSA ECA LAC SA total female MENA 0 20 40 60 80 100PDF created with pdfFactory trial version
  22. 22. MENA’s job problem cannot be a ri b ed sol e y to ut l a slow pace of job crea o rel a ve t o grow h n t • Oil importers record a slow response of job crea o to in om g owt h n c e r • Oil exporters create jobs at a fast pace rela v to g owt h so thei r m i n e r a problem is low income growth • In all MENA countries, job quality is an issue Employment-growth elas ci es, 204- 08 0 Source: ILO.PDF created with pdfFactory trial version
  23. 23. ECA: job losses remain a big concern • ECA: Unemployment increased signifi l y d i n the cri si s; 1 in 8 a e cant ur g r unemployed • Youth unemployment is a concern; 3 in 10 young adults are unemployed Unemployment rates (percent, latest available) Youth unemployment rates in select ECA countries (percent, Q1 2011) Source: Employment Monitor-- h p: //go. w r l d o bank. o g/B8M I 3 0 r MA 1IPDF created with pdfFactory trial version
  24. 24. Equatorial Guinea Angola SSA: A more inclusive and Chad Sudan Nigeria 30% Oil countries sustained growth Cameroon •Thanks to cfrom the Congo, Rep. Gabon crisis Average GDP Liberia Mozambique growth rates Sub Saharan Africa GDP growth Sierra Leone Rwanda 1998-2008 Sao Tome and Princ. Ethiopia Tanzania Cape Verde Percentage of total African population Mali Burkina Faso Growth 4% or higher Botswana 40% Ghana The Gambia Mauritius Namibia Senegal Niger Benin Zambia Madagascar Kenya GDP Growth - SSA Malawi South Africa Guinea Lesotho Swaziland Seychelles Growth less than 4% Burundi 30% Congo, Dem. Rep. Comoros CAR Togo Côte d’Ivoire Eritrea Guinea-Bissau Zimbabwe -5.0 0.0 5.0 10.0 15.0 20.0 25.0PDF created with pdfFactory trial version
  25. 25. Growth performance in SSA GDP growth in Sub-Saharan Africa by country groups Source: World Development Indicators, World Bank.PDF created with pdfFactory trial version
  26. 26. Africa’s infrastructure defi t ci Infrastructure deficit (billion dollars/year) Total gap $93 Current expenditures $45 Potential efficiency gains $17 ________________________ Funding gap $31PDF created with pdfFactory trial version
  27. 27. Concluding remarks • Global recovery more vulnerable. Recent turbulence in fianc i a m r ket s n l a and uncertainty about future prospects is impac n g owt h in b h h g g r ot i h- income and developing countries • Risks of contagion are increasing and may have serious consequences for the global economy • Mechanisms to address the Eurozone crisis need to be rapidly deployed • Developing countries are in a more vulnerable posi o than in 2 n 007/ 8 • Structural reforms to foster job crea o rem i n cri ca (a h n a l lt ough as th e Arab Spring illustrates expansion of employment opportuni e m y n s a ot be enough if these opportuni e fal l shor t o the e s f xpecta on of jo s b seekers – par cul a l y in the case o e at ed y h) r f duc outPDF created with pdfFactory trial version
  28. 28. References • Fischer, R.W., 2011, “Explaining Dissent on the FOMC Vote for Opera o T i st (w th ref er ence to Jan M yen Isl a n w i a nd, P V cker aul ol and Thor’s Hammer),” Dallas, Texas: Federal Reserve Bank of Dallas. • IMF, World Economic Outlook, several years • Primo Braga, C.A., and G.A. Vincele e, e , 2 ds 010, S over ei g D bt n e and the Financial Crisis: Will This Time Be Diff ent ? , Washington, er D.C.: The World Bank. • World Bank, 2011, Africa’s Future and the World Bank’s Support to It, Washington, D.C.: Africa Region, The World Bank. • World Bank, 2011, “Developing Trends: September 2011,” Washington, D.C.: Development Prospects Group, The World Bank. • World Bank, 2011, Inves n fo G owt h a Jo , Washington, g r r nd bs D.C.: MENA Region, The World Bank.PDF created with pdfFactory trial version