This ODI Working Paper synthesises findings on the global macro-economic and financial situation from existing publications and secondary data, on a selected sample of developing countries to the three current major global shocks (the euro zone crisis, China’s and India’s growth slow-down, energy price shocks), and on three detailed case studies (Cambodia, Kenya and Zambia).

It provides an update on the macro-economic and financial situation of lower-income developing countries in the context of the largest current global shocks. In particular, it aims to:

• update information on the effects of the euro zone crisis, the slow-down of growth in China and India and energy price shocks by examining the following transmission mechanisms: private capital flows (splitting out portfolio flows, foreign direct investment (FDI) and international bank lending); trade; remittances; aid; and energy prices;
• update information on expected country vulnerability to these shocks;
• examine in more detail a number of countries as case studies, and report how they have been affected by recent shocks and how they have responded;
• continue to monitor policy responses at both the global and country levels.