Global Economic Outlook and l kInternational Monetary Framework

Takatoshi KatoJapan Center for International Finance

１．Downward Revision Trend of IMF World Economic Outlook(％）(％）

Apr IMF(1) Sep IMF(1) Jan IMF(1) Sep IMF(1) Jan IMF(1)

2012 2013

rea l  rateof growth

year

Apr. IMF(1) Sep. IMF(1) Jan. IMF(1) Sep. IMF(1) Jan. IMF(1)

United States 2.9 1.8 1.8 2.5 2.2

of growth

Euro Area 1.8 1.1 -0.5 1.5 0.8

Japan 2.1 2.3 1.7 2.0 1.6p

China 9.5 9.0 8.2 9.5 8.8

India 7.8 7.5 7.0 8.1 7.3

Brazil 4.1 3.6 3.0 4.2 4.0

Notes： (1) forecast in the IMF World Economic Outlook

World (2) 4.5 4.0 3.3 4.5 3.9

(2) real rate of growth of world economy on PPP basis

１

2. Global recovery is threatened by intensifying strains in the euro area

Moderate  global recovery  was 

vulnerable to shocks…

o Recoveries from financial crises tend to be weako Two brakes on advanced economies’ recovery: 

o Fiscal consolidationo Tight credit

th th

o Tight credit

Fiscal worries Financial concerns… then the euro area crisis worsened.

sca o es a c a co ce s

Growth concerns

The worst can be avoided but the right

o Euro area crisis must be decisively containedo In AEs, fiscal consolidation must proceed, but at 

i t dibl di t fi lavoided, but the right measures are urgently

needed.

an appropriate pace; credible medium‐term fiscal plans are neededo Emerging/developing economies should respond to weaker external and domestic demand

２

３．３．More sovereign issuers have entered into the “zone of More sovereign issuers have entered into the “zone of vulnerability”vulnerability”vulnerabilityvulnerability

Sovereign CDS SpreadsBelow 150 bps 150-200 bps 200-400 bps Over 400

bps

Sovereign CDS SpreadsBelow 150 bps 150-200 bps 200-400 bps Over 400

bps

Euro Area Government Bond Markets

(percent of total euro area government debt)

April 2010

bpsbpsp

January 2012January 2012September 2011

Greece5%

Ireland1% Portugal

2%German

Netherlands5%

Greece4%

Ireland1% Portugal

2%

Netherlands5%

Greece4%

Ireland1% Portugal

2%

Netherlands5%

2%

Italy26%i l d

y22%

Italy25%

Germany23%

Italy25%

Germany23%

26%

SpainFrance21%

Austria3%

Finland1%

SpainFrance21%

Austria3%

Finland1%

Spain10%

France21%

Austria3%

Finland1%

Spain9%Belgium

5%

21% 10%Belgium5%

21%3% 10%Belgium5%

21%

３

4. Downside risks have escalated, with an intensified  euro area crisis   being the most immediate riskbeing the most immediate risk.

WEO Downside Scenario: Intensification of Euro Area Crisis (percent deviation from WEO baseline)(p f )

0

World Real GDP Euro area Real GDP

‐1

‐2

Other Risks: 

o Insufficient progress on medium‐term fiscal plans in US, Japan

o Possibility of a hard landing in key 4

‐3

y g yEMs

o Geopolitical risks to oil supply

5

‐4

2011:Q4

12:Q4

13:Q4

14:Q4

15:Q4

16:Q4

‐5

４

５．Destination of Exports and ImportsExport Destination (%) (2010)

Asean Japan China Korea

Asean 24.6% 9.4% 19.4% 4.0% 57.3% 9.7% 10.8% 22.2% 100.0%

EU Rest TotalAsean+3

U.S.Importer

Exporter

Japan 14.6% － 24.9% 8.1% 47.6% 15.6% 11.3% 25.5% 100.0%

China (1) 10.2% 8.6% － 4.7% 23.5% 20.5% 22.3% 33.7% 100.0%

Korea 11.2% 5.6% 30.6% － 47.5% 10.0% 9.6% 33.0% 100.0%

15.2% 6.8% 13.9% 4.6% 40.5% 15.3% 15.4% 28.8% 100.0%

5.5% 4.7% 9.3% 3.0% 22.6% － 18.8% 58.6% 100.0%

1.5% 1.0% 3.3% 0.7% 6.4% 5.5% 67.2% 20.9% 100.0%

Asean + 3

United States

EU

Import Destination (%) (2010)

Asean Japan China KoreaTotal

Asean+3

U.S. EU RestExporter

Importer Asean Japan China Korea

Asean 26.6% 11.7% 16.1% 5.4% 59.8% 8.1% 8.7% 23.3% 100.0%

Japan 14.6% － 22.3% 4.1% 41.0% 9.9% 9.6% 39.5% 100.0%

China (1) 13 3% 13 3% － 9 6% 36 2% 7 7% 12 4% 43 7% 100 0%

+3Importer

China (1) 13.3% 13.3% － 9.6% 36.2% 7.7% 12.4% 43.7% 100.0%

Korea 11.9% 16.2% 19.6% － 47.7% 10.1% 8.5% 33.7% 100.0%

17.0% 10.7% 10.7% 6.4% 44.8% 8.5% 10.4% 36.2% 100.0%

5 7% 6 3% 19 7% 2 6% 34 2% － 16 6% 49 2% 100 0%

Asean + 3

United States

Source: IMF Direction of Trade Statistics Note(1): include Hong Kong

5.7% 6.3% 19.7% 2.6% 34.2% 16.6% 49.2% 100.0%

2.1% 1.6% 7.4% 0.9% 12.0% 3.8% 62.9% 21.2% 100.0%

United States

EU

５

６．Euro area banks and emerging market economies（End Q2 2011)

1 Euro area banks’ foreign claims on all sectors as a share of total credit to non-banks, in per cent. The numbers in parentheses indicate euro area banks’ foreign claims on banks as a percentage of total credit to non-banks. 2 Euro area banks’ foreign claims on all sectors as a share of total credit to non-banks, weighted by the ratio of the recapitalization needs (RN) of each BIS reporting euro area banking system to its risk-weighted assets, as identified by the EBA in October 2011. For each country, the index is

li d th t it ld b l t th i ht t t d i l 1 if ll BIS ti b ki t h d l t f f i l i thnormalized so that it would be equal to the unweight percentage reported in column 1 if all BIS reporting euro area banking systems had equal amounts of foreign claims on the respective country. 3 Euro area banks’ cross-border claims as a share of their foreign claims, in per cent. 4 Euro area banks’ international claims with a remaining maturity of up to one year as a share of their international claims, in per cent. 5 Euro area-located banks’ debt securities as a share of their cross-border claims, in per cent.

Sources: European Banking Authority (EBA); IMF; BIS consolidated banking statistics (immediate borrower and ultimate risk basis); BIS locational banking statistics by residence.

６

７．Development of Real Effective Exchange Rates

（BIS Calculation）（BIS Calculation）

(2010＝100）

J K Chi G U S S it l dJapan Korea China Germany U.S. Switzerland

Dec 2007 (A) 83 0 123 9 90 8 106 8 100 3 88 9Dec. 2007 (A) 83.0 123.9 90.8 106.8 100.3 88.9

Dec 2010 (B) 101 4 101 2 101 7 98 8 96 9 105 6Dec. 2010 (B) 101.4 101.2 101.7 98.8 96.9 105.6

106 297 6Dec 2011（C) 103 7 97 6 108 0 98 0

Ｃ／Ａ－100（％） ＋24 9% △21 2% ＋18 9% △8 2% △2 7% ＋19 5%

106.297.6Dec. 2011（C) 103.7 97.6 108.0 98.0

Source: BIS, effective exchange rates (Broad indices comprising 61 economies)

Ｃ／Ａ 100（％） ＋24.9% △21.2% ＋18.9% △8.2% △2.7% ＋19.5%

７

８． Currency Distribution of Global Foreign Exchange Market Turnover (selected currencies; in percent)Turnover (selected currencies; in percent)

Source: BISNotes: The percentage shares of individual currencies sum to 200%, because two currencies are involved in each transaction.Data are adjusted for local and cross-border inter-dealer double counting (i.e., “net-net” basis). (a) For 1998, the data cover local home currency trading only. (b) Included as main currency separately reported by the BIS from 2010.

８

９．International Investment positions in 2010(in billions of U.S. dollars)

ro Area

erman

y

Japa

n

itzerland

U.K.

U.S.

Brazil

China

India

Russia

th Africa

Eu Ge J

Sw

C R

Sou

Net Position ‐1,649 1,383 3,088 786 ‐317 ‐2,471 ‐698 1,791 ‐223 16 ‐65

b lLiabilities

Total 23,620 7,167 3,831 2,499 14,857 22,786 1,294 2,335 633 1,157 369

1 FDI 4 967 957 215 576 1 076 2 659 473 1 476 198 493 1481. FDI 4,967 957 215 576 1,076 2,659 473 1,476 198 493 148

2. Portfolio 9,852 3,020 1,872 767 3,939 11,709 656 222 171 278 180

    Equity 4,243 590 989 672 1,472 3,510 430 206 138 233 138

    Debt 5,608 2,430 883 95 2,467 8,199 226 16 33 45 42

3. Other invst. 7,094 2,140 1,680 1,005 6,375 4,876 161 637 264 383 42

4. Fin. Derivatives 1,708 1,051 65 150 3,467 3,542 4 0 0 3 0

Source: IMF’s International Financial Statistics.

９

１０．Merchandise Exports (2009)

Merchandise Exports（＄billion) ％ of World Exports

1 Euro area 3 598 28 81. Euro area 3,598 28.8 (of which Germany) (1,126) (9.0)

2. China 1,202 9.6

3. United States 1,056 8.5

4. Japan 581 4.7 p

5. Korea 364 2.9

6. United Kingdom 352 2.8g 352 2.8

7. Canada 317 2.5

8. Russia 303 2.48. Russia 303 2.4

World 12,492 100.0

Source: 2011 World Development Indicators

１０

１１．Government and Corporate Bond Turnover, 2010:A Cross-Country Perspective

１１