A powerpoint presentation on the state of the global recovery, with specific reference to the US, Eurozone, and CEEMEA

1. Where Next for the World Economy? Strategies, Risks and Scenarios for the Recovery (2011-2015) Justin Patrie, Head of Country Risk & Financial Markets Business Monitor International

4. This can be your title page I. Global Outlook

5. The Maturation Of The Recovery… Eurozone Source: Eurostat and Bureau of Economic Analysis United States GDP By Expenditure Percentage Point Contribution To Growth

7. Credit Markets Are Coming Back… Eurozone credit growth is expected to rise further After its greatest period of contraction in over 60 years, US credit is showing signs of expansion Source: European Central Bank and US Federal Reserve

9. Capital Markets Are Well Beyond The Crisis Phase… German 2-year treasury yields (%) MSCI World Equity Index

10. Divergence Will Continue To Be A Major Theme 2. The developed world lags emerging markets in monetary policy tightening. This will help push rebalancing in EMs. 3. The US recovery will not be commensurate with a strong labour or housing market. This suggests divergent sectoral performances 1. Eurozone will be a region divided, with sharp differentiations in credit conditions, labour markets, demand and growth. Germany to outperform EM currencies to appreciate business investment to be key growth engine

15. Risk 4: Commodities Price Super Spike Could oil go back to US$150/bbl? Only if Saudi Arabia or another major producer experiences an unlikely political event… Food price inflation is a major factor in MENA unrest and contributing to rate hikes. Grains could rise to records should supply remain tight… ? ?

19. 2. But when the EFSF came into play, the correlation broke down . Greek yields kept rising but euro reversed and has been appreciating since… Greece No Longer Moves Euro Markets…

20. Spain: Risks Are There But No Need To Panic Source: European Central Bank Banking sector is stabilising, with crisis risks mitigating by the month… While a systemic solvency crisis is less of a risk, the macro story will be weighed down for years… Unemployment Rates, %

21. Spain: Housing/Construction Is A Disaster… Source: Instituto Nacional de Estadistica, TINSA IMIE, Business Monitor International Forecasts House Prices, Decline From Peak (%) BMI Spain Forecasts 2008 2009 2010 2011f 2012f 2013f 2014f 2015f Real GDP Growth (%) 0.9 -3.7 -0.6 0.7 1.4 1.9 2.0 2.1 Private Consumption Growth (%) -0.6 -4.2 -1.5 0.5 1.2 1.6 1.9 1.9 Capital Investment Growth (%) -4.8 -16.0 -5.0 -0.5 1.5 1.9 2.5 2.4 Inflation (% ave) 4.1 -0.3 1.0 1.3 2.0 2.2 2.3 2.3

22. As An Aggregate, The Eurozone Recovery Looks Healthy Source: Eurostat Percentage pt. contribution to real GDP growth

23. It All Begins With German Industry… Without the leverage over-hang of the UK or US and its highly productive export sector… … Germany has been able to take advantage of the boom in EMs and recovering French demand. Source: DeSUS, Institute for Economic Research (IFO)

24. Export Strength Has Filtered Through To Wider Business Sectors… Source: IFO Services and Manufacturing Rising In Tandem Corporate confidence at record highs

26. ZEW Survey Affirms Maturation Of Recovery Confidence Is Back At Cycle Highs, Though Expectations Suggest Peak Is Near… Source: ZEW, Business Monitor International Forecasts BMI Germany F/casts 2010 2011 2012 2013 Real GDP Growth (%) 3.6 3.5 2.0 1.8 Private Consumption Growth (%) 0.5 1.3 1.0 1.0 Capital Investment Growth (%) 5.5 4.1 2.4 1.7 Inflation (% ave) 0.5 1.6 1.8 1.2 Industrial Production (% ave) 14.2 9.0 5.0 3.0

27. What Does This Mean For The Eurozone? 1. Wide divergences, with Germany leading, France and Italy in the middle and Spain, Greece and Portugal lagging- a ‘3-speed Europe’ Unemployment, % of Total Source: Eurostat Employment Rate, % of Total

28. 2. The Consumer Has Lagged, But Will Play Catchup Source: EU Commission Survey Household Savings Rates, % EU Confidence Indices Lower household savings rates reflective of improved confidence and bodes well for investment growth

29. 3. Investment Rates Will Rise… Manufacturing Capacity Utilisation has rebounded Which bodes well for corporate investments Source: Eurostat

34. No Wonder The Dow’s Doubled Since Mid-2009 US corporate profits are at record highs! Like In Europe, the industrial sector has led the way Source: Bloomberg, ISM

35. Companies Sitting On Piles Of Cash, Though Small Businesses Still Suffering Source: Bloomberg

36. Labour Market Has Been Slow To Recover… Americans are leaving the workforce: Unemployment rate is coming down, but participation remains at record lows NFP’s will be key to watch

37. There Has Been A Structural Shift In Long-Term Personal Consumption Source: Business Monitor International

38. The Status Of US Balance Sheet Repair: But there are tentative signs that households are coming back slowly

39. Monetary Conditions Bode Well Banks are sitting on record reserves Consumer credit beginning to pick up

41. This can be your title page II. CEEMEA Strategy

45. Oil Exporters Oil Importers Crisis Lib, Bah Outliers Alg, Irq, Irn Gulf Monarchies SA, Qat, UAE, Kw,Om Monarchies Mor, Jor Outliers Leb Crisis Tun, Egp, Syr, Yem More Stable Less Stable Less Stable Wide Divergences In Political Stability Source: Business Monitor International

48. This can be your title page III. Conclusion & Appendix

50. This can be your title page Appendix I: Western Europe GDP Forecasts Table Source: Business Monitor International 2011f 2012f 2013f 2011f 2012f 2013f 2011f 2012f 2013f Western Europe REAL GDP GROWTH, % GDP, EURbn GDP PER CAPITA, EUR Austria 2.0 1.9 1.9 294 306 319 35,067 36,480 37,899 Belgium 1.7 2.1 2.2 365 380 395 31,262 34,094 35,220 Cyprus 1.2 1.8 2.4 18 19 20 21,507 22,207 23,083 Denmark 2.0 2.3 2.6 306 332 364 54,842 59,582 65,222 Eurozone 2.2 1.8 2.0 9,366 9,701 10,059 28,365 29,327 30,357 Finland 2.7 2.2 2.3 187 194 201 34,753 35,858 37,011 France 1.7 1.7 2.0 2,015 2,090 2,171 31,932 33,005 34,196 Germany 3.5 2.0 1.8 2,582 2,678 2,757 31,703 32,963 34,028 Greece -3.1 0.9 1.3 221 224 229 19,479 19,718 20,092 Iceland 2.5 3.2 1.6 11 14 15 35,121 43,164 46,715 Ireland 1.3 2.1 2.2 160 167 174 35,445 36,510 37,411 Italy 1.6 1.9 1.9 1,479 1,533 1,590 24,376 25,257 26,188 Netherlands 2.2 2.3 2.7 619 644 678 37,430 38,749 40,662 Norway 2.0 2.3 2.2 388 428 446 78,849 86,420 89,330 Portugal -1.3 0.8 1.8 168 170 175 15,749 15,912 16,410 Spain 0.7 1.4 1.9 1,074 1,113 1,162 23,082 23,741 24,602 Sweden 4.4 3.0 2.5 392 419 433 36,888 39,315 42,297 Switzerland 1.9 2.0 2.0 426 425 437 54,595 54,291 55,653 UK 1.7 2.2 2.5 1,792 1,998 2,284 28,646 31,784 36,157

51. This can be your title page Appendix II: Central and Eastern Europe GDP Forecasts Table Source: Business Monitor International 2011f 2012f 2013f 2011f 2012f 2013f 2011f 2012f 2013f CEE REAL GDP GROWTH, % GDP, EURbn GDP PER CAPITA, EUR Albania 5.0 6.5 6.7 10 12 14 3,148 3,747 4,318 Armenia 6.0 5.9 5.7 8 10 12 2,641 3,271 3,812 Azerbaijan 5.9 6.0 6.1 38 45 55 4,196 4,984 5,951 Belarus 6.7 6.4 6.7 44 51 59 4,557 5,320 6,169 Bulgaria 2.7 3.3 4.0 36 41 44 4,735 5,487 5,897 Croatia 1.7 1.9 2.2 44 47 52 9,993 10,691 11,756 Czech Republic 2.4 3.2 3.8 159 176 195 15,052 16,692 18,395 Georgia 5.5 6.3 5.5 10 12 14 2,314 2,884 3,452 Hungary 2.3 2.6 2.8 115 127 138 11,556 12,733 13,907 Kazakhstan 6.3 7.0 7.5 103 129 158 6,302 7,848 9,543 Poland 4.6 3.8 4.0 399 453 513 10,474 11,880 13,496 Romania 2.1 3.3 4.2 135 150 165 6,315 7,068 7,797 Russia 4.3 4.5 4.7 1,204 1,517 1,899 8,527 10,788 13,553 Serbia 3.2 4.0 4.9 32 36 42 4,460 4,962 5,754 Slovakia 3.2 3.5 3.8 70 74 78 12,319 12,757 14,078 Slovenia 2.0 3.0 2.9 37 39 41 18,094 19,005 19,992 Turkey 4.3 4.5 5.4 575 684 834 7,505 8,839 10,656 Ukraine 3.6 4.4 4.7 108 140 175 2,382 3,088 3,888 Uzbekistan 8.5 8.4 8.0 31 37 44 1,064 1,244 1,465 Turkmenistan 9.7 10.0 10.2 15 18 22 3,383 4,084 5,014

52. This can be your title page Appendix III: Middle East & North Africa GDP Forecasts Table Source: Business Monitor International 2011f 2012f 2013f 2011f 2012f 2013f 2011f 2012f 2013f MENA REAL GDP GROWTH, % GDP, EURbn GDP PER CAPITA, EUR Algeria 2.7 3.7 4.7 143 165 180 3,983 4,518 4,852 Bahrain -1.6 1.6 2.8 22 25 26 27,016 29,992 30,617 Egypt 3.2 3.7 4.9 170 203 257 2,010 2,361 2,943 Iran 1.2 2.4 2.2 325 374 433 4,348 4,936 5,645 Iraq 5.5 5.2 6.6 109 125 142 3,284 3,689 4,091 Israel 3.8 3.3 3.2 174 195 216 22,471 24,782 26,969 Jordan 3.8 4.2 4.5 18 21 24 2,761 3,049 3,471 Kuwait 3.4 4.0 4.0 111 128 137 38,060 42,879 44,840 Lebanon 5.5 4.8 4.8 31 36 40 7,184 8,306 9,225 Libya -23.2 2.7 3.3 50 63 80 7,427 9,315 11,540 Morocco 4.3 4.3 4.2 65 72 81 1,979 2,166 2,434 Oman 4.3 3.7 1.8 38 42 47 12,703 13,816 15,092 Qatar 17.2 7.8 6.6 106 122 143 69,156 78,437 90,024 Saudi Arabia 5.0 5.1 3.6 293 330 375 11,043 12,195 13,583 Syria 4.3 5.0 4.7 49 57 66 2,235 2,510 2,856 Tunisia 1.3 2.3 4.9 30 34 39 2,831 3,181 3,529 UAE 3.3 3.2 3.1 211 235 262 43,865 47,820 52,442 Yemen 2.2 3.3 2.7 25 28 31 1,008 1,086 1,187

53. This can be your title page Appendix IV: Sub-Saharan Africa GDP Forecasts Table Source: Business Monitor International 2011f 2012f 2013f 2011f 2012f 2013f 2011f 2012f 2013f Sub-Saharan Africa REAL GDP GROWTH, % GDP, EURbn GDP PER CAPITA, EUR Angola 7.6 7.9 6.3 80 111 127 4,118 5,510 6,167 Botswana 5.1 5.0 5.0 12 14 17 5,774 6,818 8,381 Cameroon 3.7 5.7 5.2 19 21 25 916 1,008 1,152 Cote d’Ivoire -5.4 7.7 3.2 19 22 24 886 1,018 1,074 Congo (Rep. Of) 5.9 3.2 2.0 7 7 8 1,768 1,868 1,963 Ethiopia 8.5 7.6 7.0 19 22 25 218 240 273 Ghana 14.0 7.9 7.5 25 35 49 1,001 1,371 1,895 Kenya 5.2 6.3 5.9 29 36 45 701 837 1,025 Mauritius 5.5 5.1 5.3 8 10 11 6,161 7,600 8,730 Mozambique 8.2 6.9 6.5 8 12 16 352 480 627 Namibia 4.5 5.2 5.8 10 13 14 4,827 5,803 6,358 Nigeria 7.8 7.6 7.8 221 282 370 1,359 1,693 2,169 South Africa 3.5 4.0 4.3 308 361 432 6,147 7,130 8,438 Sudan -10.9 2.4 4.8 44 48 61 1,256 1,335 1,669 Tanzania 6.5 6.6 6.3 18 22 26 391 450 537 Uganda 7.0 9.3 9.7 13 16 22 399 499 644 Zambia 7.5 7.2 6.1 14 17 22 1,007 1,238 1,506

54. This can be your title page Appendix V: Exchange Rate and Interest Rate Forecasts Source: Business Monitor International 2011f 2012f 2013f 2014f 2015f 2016f 2017f EXCHANGE RATES (average) Global Benchmarks US$/EUR 1.43 1.39 1.30 1.25 1.25 1.25 1.25 JPY/US$ 88.00 90.75 93.75 97.50 102.50 105.0 107.50 CNY/US$ 6.55 6.43 6.31 6.18 6.06 5.94 5.82 US$/GBP 1.67 1.70 1.75 1.75 1.75 1.75 1.75 CEEMEA Currencies RUB/EUR 42.16 37.57 33.47 31.56 31.25 31.25 31.25 TRY/EUR 2.13 1.99 1.83 1.73 1.71 1.70 1.68 PLN/EUR 3.82 3.52 3.36 3.30 3.17 3.13 3.11 ZAR/EUR 9.39 8.83 8.15 7.76 7.68 7.61 7.53 EGP/EUR 8.51 8.14 7.38 7.06 7.05 6.65 6.25 INTEREST RATES (end of period) US Fed Funds Rate 0.00 2.00 3.50 4.25 4.25 4.25 4.25 ECB Refinancing Rate (Eurozone) 2.00 3.25 4.00 4.00 4.00 4.00 4.00 BoJ O/N Call Rate (Japan) 0.10 0.10 0.10 0.10 0.10 0.25 0.50 BoE Bank Rate (UK) 1.00 2.25 3.25 4.00 4.50 5.50 5.50 SNB 3M LIBOR Target (Switzerland) 0.75 1.25 1.50 2.00 2.00 2.00 2.00 BoC O/N Rate (Canada) 2.00 3.00 4.25 4.50 4.50 4.50 4.50 PBOC 1Y Lending Rate (China) 6.81 6.81 6.81 6.81 6.81 6.81 6.81 CBR Refinancing Rate (Russia) 8.50 9.50 9.00 8.50 8.00 7.00 7.00

56. This can be your title page Thank You Business Monitor International [email_address]