Global Economic Prospects, January 2012 : Uncertainties and Vulnerabilities

The world economy has entered a dangerous period. Some of the financial turmoil in Europe has spread to developing and other high-income countries, which until earlier had been unaffected. This contagion has pushed up borrowing costs in many parts of the world, and pushed down stock markets, while c...

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Bibliographic Details
Main Author:	World Bank
Format:	Working Paper
Language:	en_US
Published:	Washington, DC 2013
Subjects:	access to bond markets accounting asset base asset prices bailout balance of payments bank activity bank assets bank balance sheets Bank Debt bank lending bank loans Banking Assets banking crises banking sector banking sectors banking system banking systems basis point basis points binding constraint bond auctions Bond Bank bond funds bond indexes bond issuances bond issuer bond sales bond spreads Bond yields bonds borrowing costs business cycle capital adequacy capital flow Capital flows capital markets capital outflows capital requirements capital stock CDS Central Bank central banks collateral commercial banks Commodities commodity commodity exports commodity price Commodity Prices consumer durables contingency planning Copyright Clearance Copyright Clearance Center corporate bond corporate bond issuance country debt credit default credit default swap credit default swaps credit histories credit squeeze credit squeezes creditors cross-border flows currency depreciations currency risk Current Account Deficit current account deficits debt crisis debt flows debt holdings debt issues debt levels debt ratios Debt Repayment debts defaults deficits deposit depositors deposits developing countries Developing country developingcountry domestic bank domestic banking domestic banks domestic bond domestic bond markets Domestic bonds downside scenario downside scenarios economic developments emerging market emerging market equities Emerging Markets emerging-market enforcement mechanisms equity flows equity funds equity issuance equity markets equity values exchange rate Exchange Rates expenditure expenditures export growth exporters exposure external debt finances financial crises financial crisis Financial flows financial institutions financial markets Financial Stability financial stress financial support financial systems financing requirements fiscal deficits fixed investment food prices foreign banks foreign capital foreign currency foreign holdings foreign investment foreign investor Global Economic Prospects Global Economy global financial markets global markets global trade government bonds government deficit government deficits government financing government revenues growth rates holding holdings host countries Income incomes Inflation inflation rate inflationary pressures insurance interest rate interest rates International Bank international bond International capital International capital flows international financial market International Trade investment vehicles liquidity loan loan exposures loan portfolios local currency local government local markets local stock markets long term debt long-term debt long-term yields loss of confidence mark-to-market market competition market conditions market confidence market equity market participants market price market prices market value middle-income countries monetary policy Net debt non-performing loan nonperforming loans oil price oil prices output pension pension system policy response political uncertainty portfolio power parity private banks private capital private capital inflows Private creditors private debt prudential regulation purchasing power remittance remittances reserves return risk aversion safety net secondary bond markets short-term bonds short-term debt short-term finance Short-term yields social safety net solvency sovereign bond sovereign debt sovereign yields stock markets sustainable growth swap tax trade finance trade sectors trading tranche transition countries valuations wholesale funding world economy world trade
Online Access:	http://hdl.handle.net/10986/12105

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Summary:	The world economy has entered a dangerous period. Some of the financial turmoil in Europe has spread to developing and other high-income countries, which until earlier had been unaffected. This contagion has pushed up borrowing costs in many parts of the world, and pushed down stock markets, while capital flows to developing countries have fallen sharply. Europe appears to have entered recession. At the same time, growth in several major developing countries (Brazil, India and, to a lesser extent, Russia, South Africa and Turkey) is significantly slower than it was earlier in the recovery, mainly reflecting policy tightening initiated in late 2010 and early 2011 in order to combat rising inflationary pressures. As a result, and despite a strengthening of activity in the United States and Japan, global growth and world trade have slowed sharply.

Global Economic Prospects, January 2012 : Uncertainties and Vulnerabilities

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