1. ECONOMIC OUTLOOK
2016LOWER SPEED, MORE
TURBULENCE
Peter De Keyzer - Chief Economist
Philippe Gijsels - Chief Strategy Officer
01/12/2015
2. | 01/12/2015 |Meet The Press 2
ECONOMIC OUTLOOK 2016
MONETARYPOLICY
2
WORLDTRADE
1
UNITEDSTATES
FRAGILEEMERGING
ECONOMIES
4
3
EUROZONE
5
BELGIUM
6
Brazil
China
6GAME
CHANGERS
3. | 01/12/2015 |Meet The Press 3
MORE UNCERTAINTY, LESS GROWTH
?
WEAKER WESTERN
GROWTH…
…but shock is bigger
in emerging markets
LOW OIL PRICE
SUPPORTS WESTERN
GROWTH…
…but shock is bigger
in emerging markets
MORE
UNCERTAINTY…
…and more volatility
4. | 01/12/2015 |Meet The Press 4
MORE UNCERTAINTY, LESS GROWTH
1.
ECONOMIC
CRISIS
2. EUROZONE
CRISIS
3. EMERGING
MARKET
CRISIS
AFTER
SHOC
K
5. | 01/12/2015 |Meet The Press 5
OVERVIEW OF THE WORLD
ECONOMIC OUTLOOK
PROJECTIONS
Source: National statistics offices, International Monetary Fund, BNP Paribas Fortis
United States
Eurozone
Japan
Emerging Market and
Developing economies
in % change
2016 2015 2016
2,0
1,5
0,6
4,4
0
-0,1
-0,3
0
-0,9
-0,4
-0,3
-0,9
FORECASTS CHANGES SINCE
JUNE
2017
1,9
1,8
0,4
5,0
8. | 01/12/2015 |Meet The Press 8
COMMODITIES ARE IN SHOCK…
Source: BNP Paribas Fortis, Macrobond
Commodity Indices
All Items Index, in USD
50
75
100
125
150
175
200
225
250
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
WORLDTRADE
1
9. Meet The Press
…AND SO ARE A LOT OF
COMMODITY EXPORTERS
Source: BNP Paribas Fortis Statistical Review of World Energy, 2015; Institutional Investors Sovereign Wealth Center, national authorities;
Sovereign Wealth Fund Institute; and U,S, Geological Survey; International Monetary Fund
Note: FDI = foreign direct investment.
Countries with more than 20% of
exports from nonrenewable commodities
All other countries
17%
Share of GDP
17%
Share of Imports
Share of ExportsShare of FDI
21% 22%
Nonrenewable Commodity Exporters, 2014
| 01/12/2015 | 9
WORLDTRADE
1
10. | 01/12/2015 |Meet The Press 10
WEIGHING ON WORLD TRADE…
Source: OECD Economic Outlook 98 database
Global import volume growth has slowed this year
World OECD Non-OECD
% YoY changes
-4
-2
0
2
4
6
8
2014
Q3Q2Q1
2015
20132012
WORLDTRADE
1
11. OPEC remains committed to
share at the expense of the oil
price
More US rigs inactive production
may come under pressure
Iran may come to the market with
1.1 m b/day and sanction
disappear
Expected range for oil prices
between 50 - 60 USD
OIL PRICES: SUPPLY
REMAINS HIGHER THAN
DEMAND
| 01/12/2015 |Meet The Press 11
Source: Thomson Reuters Datastream
Brent
USD
2009 2010 2011 2012 2013 2014 2015
20
40
60
80
100
120
140
Target Bottem
Target Top
48.2800
WORLDTRADE
1
13. | 01/12/2015 |Meet The Press 13
LAST FED RATE HIKE ALMOST
A DECADE AGO… MONETARYPOLICY
2
14. 14
$60 TRILLION OF WORLD DEBT
A SIZED PALLET IS
100.000.000 $ AND
2 BILLION FOR A
TRUCK LOAD OF CASH
Source: Demonocracy.info
MONETARYPOLICY
2
15. -5
-4
-3
-2
-1
0
1
2
3
4
j m s j m s j m s j m s j m s j m s j m s j m s j m s j m s j m
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
| 01/12/2015 |Meet The Press 15
WHEN WILL RATES GO UP?
0
1
2
3
4
5
6
j m s j m s j m s j m s j m s j m s j m s j m s j m s j m s j m
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Central Bank Policy Rates Real Policy Rates
ECB Federal Reserve Bank of England
Source: BNP Paribas Fortis, Macrobond
MONETARYPOLICY
2
22. 2013 2014 2015
80
100
120
140
160
180
200
220
240
| 01/12/2015 |Meet The Press 22
AN OPPORTUNITY TO BUY IN CHINA?
Source: Thomson Reuters Datastream
Shanghai SE a share FTSE China H share
Stock connect
Political and
monetary support
Measures to limit
speculation on bonds
Doubts over Chinese
economy growth
Chinese government
intervention
FRAGILEEMERGING
ECONOMIES
4
23. GDP per capita (current
US$)
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
2010 2012 2014
Inflation to remain high
in %
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
2010 2014 2015
| 01/12/2015 |Meet The Press 23
NO MAJOR WIN FOR
THE BRAZILIAN ECONOMY
Source: BNP Paribas Fortis, Macrobond
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
2010 2011 2012 2013 2014 2015
GDP collapse % YoY change
7,5% 3,9% 1,7% 2,7% 0,2% -
3,0%
5,0% 6,3% 8,7%
FRAGILEEMERGING
ECONOMIES
4
24. Price-earnings ratio - Emerging markets
2008 2009 2010 2011 2012 2013 2014 2015
4
6
8
10
12
14
| 01/12/2015 |Meet The Press 24
EMERGING MARKETS:
ATTRACTIVE VALUATIONS
Source: Thomson Reuters Datastream
MSCI EM U$/IBES
MSCI EMG - A12FE
Average of (MSCI EM
U$/IBES MSCI EMG -
A12FE)
Average of (MSCI EM
U$/IBES MSCI EMG -
A12FE)+Standard
deviation of (MSCI EM
U$/IBES MSCI …
Average of (MSCI EM
U$/IBES MSCI EMG -
A12FE)+Standard
deviation of (MSCI EM
U$/IBES MSCI …
FRAGILEEMERGING
ECONOMIES
4
35. | 01/12/2015 |Meet The Press 35
THE NEXT CRISIS…
Source: OECD Economic Outlook 2015
Debt/GDP in Eurozone countries
in %
0
20
40
60
80
100
120
140
160
180
Gre Ita Por Cyp Ire Bel Spa Fra UK EU Aus Ger Net Fin Den Swe Rom
BELGIUM
6
37. | 01/12/2015 |Meet The Press 37
OPPORTUNITIES
IN AN IMPROVING
GLOBAL ECONOMY
INVESTMENT STRATEGIES
38. | 01/12/2015 |Meet The Press 38
A GLIMMER OF HOPE?
*In real terms; index, 2005=100)
Source: Gruss; IMF, Primary Commodity Price System; US Energy Information Administration; World Bank, Global Economic Monitor database; and IMF staff calculations.
WORLD COMMODITY PRICES, 1960-
2015 *
0
50
100
150
200
250
1510052000959085807570651960
Energy and Metals
0
50
100
150
200
250
300
1510052000959085807570651960
Food and Raw Materials % YoY change
Energy Metals
2015:
H1
Food Raw Materials
2015:
H1
39. | 01/12/2015 |Meet The Press 39
Source: Thomson Reuters Datastream / demonocracy.info
THE GOLD HELD BY CENTRAL
BANKS
1000
1200
1400
1600
1800
2000
2011 2012 2013 2014 2015
Gold prices
Gold Bullion LBM U$/Troy Ounce
1063 US$
GOLD: SAFE HAVEN?
40. | 01/12/2015 |Meet The Press 40
SECTOR RISK CLASS 5 RISK CLASS 6
Industry
Technologie
Basic Materials
Health Care
Airbus Group, Alstom
ARM Holdings
Linde, Solvay
Roche
EVS Broadcast
ASM International,
STMicroelectronics (PAR)
DSM, Lanxess
Ablynx, Smith & Nephew
Telecommunications
Consumer services
Financials
Oil & Gaz
Vodafone Group
Marks & Spencer
Aegon, Axa, Cofinimmo,
Commerzbank,
Credit Agricole, ING, KBC Ancora
Fugro
25 FAVORITES STOCKS
Consumer Goods Renault
WPP
41. | 01/12/2015 |Meet The Press 41
TOP 10 GLOBAL RISKS
Terrorism
Shengen
Russia vs
the West
Debt Crisis
Brexit
Asset
Correlations
Yield
Europe likely to slide
Japanese scenario
Xtreme
Volatility
SHORT/LONG TERM
SMALL/BIG
IMPACT
China hard landing
46. DISCLAIMER
This presentation was created for informative purposes by BNP Paribas Fortis SA/NV.
The information contained in this presentation is subject to change. While BNP Paribas Fortis
SA/NV takes great care to ensure that the information is correct, it may not be held liable for
possible errors or omissions, or the direct or indirect damage that might result from this.
BNP Paribas Fortis SA/NV, Montagne du Parc 3, B – 1000 Brussels
46
| 01/12/2015 |Meet The Press