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Tracking the consumer evolution of financial services

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The World Development Indicators 2010 | World Bank


For economists and data geeks, the World Bank is today releasing an impressive document containing a host of statistics and economic facts covering all the worlds economies and showing shifts in key areas as noted below.

World Development Indicators 2010 | World Bank

WASHINGTON, April 20, 2010 — The World Development Indicators (WDI) 2010, released today, gives a statistical progress toward achieving the Millennium Development Goals (MDGs).

The WDI database, launched along with the World Bank’s Open Data initiative to provide free data to all users, includes more than 900 indicators documenting the state of all the world’s economies. The WDI covers education, health, poverty, environment, economy, trade, and much more.

“The WDI provides a valuable statistical picture of the world and how far we’ve come in advancing development,” said Justin Yifu Lin, the World Bank’s Chief Economist and the Senior Vice President for Development Economics.  “Making this comprehensive data free for all is a dream come true.”

WORLD DEVELOPMENT INDICATORS 2010

Complete Report as One File(18mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/complete.pdf

Preface, Acknowledgments, Table of Contents, Partners, Users Guide (1.27 mb
pdf)
http://media.worldbank.org/secure/wdi2010/pdf/Frontmatter.pdf

World View (3.14 mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/section1.pdf

People (3.03 mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/section2.pdf

Environment (2.52 mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/section3.pdf

Economy (3.69mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/section4.pdf

States and Markets (2.35mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/section5.pdf

Global Links (2.84mb pdf)
http://media.worldbank.org/secure/wdi2010/pdf/section6.pdf

Primary Data Documentation, Statistical Methods, Credits, Bibliography, Index
of Indicators (521k pdf)
http://media.worldbank.org/secure/wdi2010/pdf/Backmatter.pdf

Written by Colin Henderson

April 20, 2010 at 11:00

Posted in economy

Tagged with , ,

World Bank GDF highlights growing risks to economic forecasts


When thinking about the future and the economic position of countries that banks must consider, I listen far less to politicians and more to IMF and World bank forecasts.

The use (misuse) of the term recovery fails to acknowledge what the circumstances for people and businesses will be on the other side of the recession.

Here is a new report from World Bank that looks to the future with more pragmatism, although they still use the word recovery.  Note their focus is skewed by their mandate for developing countries, however they have to look at the entire economic picture to get there.

Global Development Finance 2009: Charting a Global Recovery | World Bank

The world is transitioning from an extended credit boom and economic overheating to an era of slower growth. Looking to medium-term developments, participants in the international financial system—consumers, investors, traders, and firms—must adapt their behavior to the new realities of tightened credit conditions, a prominent role of the state in financial affairs, large excess capacity in many industrial sectors, and more closely coordinated regulatory policy

The use of the word transition here is important.  Consumers and businesses are moving from one reality (pre 2007) to another over the next 5 years.  That transition affects all bank customers, so its worth considering the impact of those shifts, and how products and services ought to be re-thought.

In simple terms the booms over the last 10 years which banks saw in mutual funds and mortgages with easy product volume crashing through the door will be replaced with thoughtful and careful consumers, who are wary of banks, for multiple reasons.  Banks took a credibility hit over the last 2 years, and that credibility will take time to restore.

Confidence in the international financial system must be restored

On a final note, it is important to recognize how the severity of the current crisis has undermined confidence in the international financial system (annex 3B). Many economic and financial indicators have exhibited unprecedented declines, moving us into uncharted territory in several respects. Uncertainty surrounding the outlook remains at an all-time high, suggesting that a nascent global recovery will be vulnerable to after-shocks of the present crisis and may not survive any marked deterioration in financial conditions.

consumer investor confidence

(Source:  World Bank use both market- and survey-based proxies to gauge investors’ confidence, combining them with measures of consumer confidence in Canada, Germany, Japan, the United Kingdom, and the United States to extract a common global index, using the  well-established method of principal component analysis.)

The report has downgraded the view on growth for 2010, and as important speaks at length about the risk associated with the projection still being too optimistic.  The graph does suggest that investor confidence is ahead of consumer confidence.

The report calls for an increase in breadth and depth of financial services regulation.  The association of government with banks through increased balance sheet support, and regulation could be a double edged sword.  Government influence suggests increased safety, but it also implies more costly services.  Customers will watch this influence carefully, and look for those banks that match their expectations and needs.

Written by Colin Henderson

June 22, 2009 at 12:01

Posted in economy

Tagged with , ,

World Bank updates Global economic prospects downward


This revised forecast shifts from 2010 recovery,to an uncertain 2010 recovery.  Read through for data and forecasts on your country.

World Bank updates global forecast

This update of the projections in the World Bank’s Global Economic Prospects report (GEP) of December 2008, reflects the rapid  deterioration in financial and economic conditions—and the increasingly negative interaction between weakening economies and fragile financial systems—that have come to the fore since late 2008 for virtually every country in the world.

gep-update-march30-2009 PDF

Written by Colin Henderson

April 17, 2009 at 19:23

Posted in economy

Tagged with , ,

Some perspective on GDP, and America’s ability to “come back”


This is much talk these days of the decline of the United States and a fundamental reshaping of relative world economic clout.

It is worthwhile to reflect on the current size of economies before such claims are made. This rambling piece from Richard Florida that I thought was going to deal with the decline of America, actually ends up making the case that the impacts on US cities will be significant.  Of that there is little doubt, but the example of Detroit may not be the best to make the point (the Phoenix example is a better one).

Detroit has had and survived at least four sets of signifcant rioting with manufacturing issues at the core, amplified by race issues.

This from the Pittsburgh News in Oct 1933 during the depression.

screenshot-pittsburgh-post-gazette-google-news-archive-search-mozilla-firefox

Indeed it is worth clicking through and reading of this particular event.

“A factory manager at one plant fired several shots as the mob approached the place, but said he aimed over the heads of the rioters”

What can I say.  The history of the US is all about survival and moving ahead despite setbacks – but I digress.  America cannot be “mis’underestimated.

Here is the GDP ranking of the world.  Bear in mind that 2% shifts in GDP are considered gigantic.  If the US economy reduced by an impossible 50% it would remain 50% larger than the next largest.  [I am aware that there has recently been reported a shift in the top 4 rankings, but the point I am making does not change]

Gross domestic product 2007 | World Bank

Ranking Economy US dollars [000’s]
1 United States 13,811,200
2 Japan                 4,376,705
3 Germany           3,297,233
4 China                 3,280,053
5 UK                      2,727,806
6 France                2,562,288
7 Italy                   2,107,481
8 Spain                 1,429,226
9 Canada              1,326,376
10 Brazil              1,314,170

There will be serious impacts, the economies of the world will be dramatically different after this event we are all part of, but i maintain the ability of the US to come back is unfathomable compared to the rest of the world. The nearest hope would be the EU if only by size, but while they try to re-architect using 20th century thinking, the US has little to fear.

I do worry about the debt levels in the world [The Great Unwinding], reflected in the banking system.  The pending impact of revaluation of that debt to accomodate new asset values will be enormous, and not seen since some of the events in the 17th and 18th centuries.   When the dust settles on that score there will be impacts on countries, exchange rates, and inflation/ deflation within those countries – impacts I am not qualified to predict, but they will come.

Written by Colin Henderson

February 15, 2009 at 16:41

Energy and commodity demand is rising or falling, and prices will rise or fall. Brilliant!


Economists have the best job in the world.  They are constantly predicting the long term future based on the recent past.  The result is that the contradictions in what they predict leaves the common person to wonder.

Global Economic Prospects 2009: Commodities at the Crossroads | World Bank

Commodity markets have seen spectacular swings over the past 24 months as enormous tensions first built up and were then released. The extended and sharp rise in commodity prices prompted concerns that the world was transitioning into a new phase of commodity scarcity—a concern that the recent dramatic drop in commodity prices has only partially alleviated.

Long-term supply and demand prospects for commodities suggest that while commodity prices are likely to be higher than they were during the 1990s and early 2000s (when they were depressed by excess supply), the recent peaks that have been observed are unlikely to be the new norms. Over the long run, demand for commodities is not expected to outstrip supply. Even though per capita incomes in developing countries are expected to continue rising rapidly, population growth is slowing and with it global GDP growth. As a result, the pace at which commodity demand expands should also ease. Assuming that efficiency with which commodities are both employed and produced continues to improve as it has done over the past few decades, supply should keep pace with demand.

In fairness the focus of this report is developing economies, but some of the quotes here defy anything we have read recently.

  • demand for commodities is not expected to outstrip supply
  • population growth is slowing and with it global GDP growth
  • the pace at which commodity demand expands should also ease
  • supply should keep pace with demand

So we get headlines such as this in the FT today “Global demand for oil to plummet“.

Yet …

The longer run is less clear. Even after the correction, the longer-running trend in energy prices is menacingly upwards.  30th July, 2008

One sane voice was Joe Lieberman “My own conclusion is that index speculators are responsible for a big part of the commodity price increases,” says Mr Lieberman, who chairs the Senate committee on homeland security and governmental affairs, among the committees to hold hearings.” 7th July, 2008

and the classic from the International Energy Agency “The energy watchdog said rapid growth in China and India meant that without a radical change in policies, both countries would double their energy consumption by 2030, putting pressure on scarce resources such as oil and raising emissions of greenhouse gases.” 7th Nov, 2007

Relevance to Bankwatch:

There we go.  Energy and commodity demand is rising or falling, and prices will rise or fall.  Brilliant!

On a more serious note, the problems associated with the politicisation of intelligence (CIA, SIS etc) applies equally to ecomomics.  Economics in particular ought to be matters of fact based on supply and demand resulting from demogrpahic, population and income predictions, all of which are relatively easy to predict.

Economists  .. please chime in and help us out here.

Written by Colin Henderson

December 9, 2008 at 21:48

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