While I welcome criticism and comments on the Doing Business (DB) report—or any other data and research product of the World Bank, for that matter—I find Justin Sandefur’s and Divyanshi Wadhwa’s (SW) recent blog posts on DB in Chile and India neither enlightening nor useful.
Non-energy prices made solid advances as well, with metals and minerals prices gaining more than 5 percent, also the seventh consecutive monthly increase, and a five-year high. Nickel and zinc, up 12 and 8 percent respectively, led the rise.
Precious metals climbed nearly 6 percent, with similar gains in gold and silver.
Agricultural prices, which had been stable for nearly 2 years, increased more than 2 percent, led by advances in rice (+9 percent) and cotton (+5 percent). Fertilizer prices rose over 1 percent, led by DAP (+3 percent) and Urea (+2 percent).
The Pink Sheet is a monthly report that monitors commodity price movements.
Source: World Bank.
Real activity indicators in Brazil improved markedly in 2017
Brazil’s recovery is expected to solidify in 2018. The economy is anticipated to grow 2 percent as improving labor conditions and low inflation support private consumption, and as policy conditions become more supportive of investment.
Sources: Haver Analytics, World Bank.
Notes: Lines show 3-month moving averages using non-seasonally-adjusted data. Last observation is October 2017.
Regional growth tumbled last year, led by oil exporters
Growth in the Middle East and North Africa is estimated to have slowed sharply to 1.8 percent in 2017 from 5 percent the year before, driven by decline in growth among oil exporters. Growth declined among Gulf Cooperation Council and non-GCC oil exporters, with oil production cuts and continued geopolitical tensions contributing to the fall-off.
This column sets out a monthly selection of social protection materials that I found particularly interesting or helpful in illuminating a certain social protection issue. It is not meant to be comprehensive, but just to highlight and discuss some of the latest thinking and evidence on the matter.
Growth to pick up in region
Growth in the region was an estimated 6.5 percent in 2017. It is forecast to pick up to 6.9 percent in 2018 and stabilize around 7 percent over the medium term. The forecast assumes strengthening external demand as the recovery firms in advanced economies, and supportive global financing conditions. Monetary policy is expected to remain accommodative as modest fiscal consolidation proceeds in some countries.
Sources: Haver Analytics, World Bank.
Note: Shaded area indicates forecasts.
The global economic recovery will see economic conditions improving in Sub-Saharan Africa. Activity is projected to pick up across the region over the forecast horizon, helped by firming commodity prices and gradually strengthening domestic demand. However, in the absence of reforms, potential growth is expected to remain low given demographic and investment trends, weighing on per capita incomes and diminishing the prospects for poverty reduction. Downside risks predominate, including the possibilities that commodity prices could remain weak, global financing conditions could tighten in a disorderly fashion, and that regional political uncertainty and security tensions could intensify. On the upside, a stronger-than-expected pickup in global activity could further boost exports, investment, and growth in the region.
Sub-Saharan Africa’s growth outlook is improving
Growth in Sub-Saharan Africa is projected to pick up to 3.2 percent this year from an estimated 2.4 percent in 2017 and 1.3 percent in 2016, and strengthen gradually. While Angola, Nigeria, and South Africa – the region’s largest economies — will struggle to boost growth, the performance of the rest of the region will be stronger.
Source: World Bank
Note: shaded areas represent forecasts
2018 will likely mark a turning point for the global economy. For the first time since 2008, the negative global output gap – defined as the difference between the levels of actual output and output if operating at full capacity – is expected to close. As the output gap closes in advanced economies, central banks are likely to normalize monetary policy after a decade of exceptional easing. With this anticipated withdrawal of stimulus by advanced economies, emerging market and developing economy policymakers need to remain alert to the potential for adverse spillovers.
Output gaps are closing
In 2018, for the first time since 2008, the negative global output gap is expected to be closed.
Source: World Bank staff estimates.
Notes: Output gaps calculated using multivariate filter. Global, regional, and group output gaps are calculated using constant 2010 U.S. dollar GDP as weights. The sample includes 15 advanced economies (Australia, Canada, Denmark, Finland, France, Germany, Italy, Japan, New Zealand, Norway, Spain, Sweden, Switzerland, United Kingdom, and United States) and 23 EMDEs (Argentina, Bolivia, Brazil, Bulgaria, Chile, China, Colombia, Croatia, Hungary, India, Indonesia, Kazakhstan, Malaysia, Mexico, Peru, Poland, Romania, Russia, Serbia, South Africa, Thailand, Turkey, and Vietnam). 2018 GDP is forecast. Dashed lines are 95 percent confidence interval bounds computed from the Kalman smoother state variances. Global lower and upper bounds are obtained as GDP-weighted averages of individual country lower and upper bounds.
Download the January 2018 Global Economic Prospects report.
The 2014-16 collapse in oil prices was driven by a growing supply glut, but failed to deliver the boost to global growth that many had expected. In the event, the benefits of substantially lower oil prices were muted by the low responsiveness of economic activity in key oil-importing emerging markets, the effects on U.S. activity of a sharp contraction in energy investment and an abrupt slowdown in key oil exporters.
Biggest drop in oil prices in modern history
Between mid-2014 and early 2016, the global economy faced one of the largest oil price declines in modern history. The 70 percent price drop during that period was one of the three biggest declines since World War II, and the longest lasting since the supply-driven collapse of 1986.
Real oil prices