Transcript Economic soft spots

Hot, bright and soft
spots: Who will make
or break global
growth?
ICTF, Barcelona
12 May, 2014
Andrew Atkinson
Economic Research Department
Agenda
1
Growth, Fragility and Financing
2
Political hot spots
3
Economic soft spots
4
Confidence bright spots
2
Below 3% GDP growth for the third year in a row:
Who will make or break global growth?
Advanced economies seem to be back in the game
Weights*
2011
2012
2013
2014
2015
World imports and
regional contributions, %
World GDP growth
100
3.0
2.5
2.3
2.9
3.2
Advanced economies
Emerging economies
62
1.6
5.2
1.4
4.4
1.2
4.1
2.0
4.3
2.4
4.6
1.9
1.8
2.5
2.7
2.8
1.7
1.9
1.9
2.0
2.7
2.8
2.6
3.1
3.2
2.7
6%
4.2
2.7
2.7
1.0
2.6
2.3
2.6
2.0
3.0
2.5
5%
1.6
1.1
-0.3
0.3
0.1
1.8
1.3
2.4
1.7
2.5
1.6
3.4
2.0
0.6
0.1
-0.6
0.9
0.0
-2.5
-1.6
-0.4
0.5
0.3
-1.8
-1.2
1.0
1.7
0.7
0.4
0.6
1.4
1.9
1.2
0.9
1.2
4.7
4.3
8.8
2.1
3.4
2.2
1.8
1.3
4.0
1.6
0.7
3.0
2.5
2.0
4.2
4.6
7.7
1.4
3.2
4.7
7.6
1.5
4.4
4.7
7.5
1.2
5.3
4.7
7.3
1.1
5.8
North America
United States
Canada
Latin America
Brazil
38
25
23
3
8
3
Western Europe
United Kingdom
23
Eurozone members
Germany
France
Italy
Spain
17
Central and Eastern Europe
Russia
Turkey
Asia
China
Japan
India
3
5
4
3
2
6
3
1
3
4.8
9.3
-0.4
6.3
Oceania
Australia
2
2
2.4
2.6
3.5
3.6
2.4
2.4
2.8
2.8
3.0
3.0
Middle East
Saudi Arabia
United Arab Emirates
4
1
4.9
8.6
3.9
3.2
5.8
4.4
2.6
3.8
3.5
3.6
4.5
4.0
4.2
5.0
4.0
Africa
Morocco
South Africa
0
1.0
5.0
3.6
6.1
2.7
2.5
4.0
4.5
1.8
4.4
4.5
2.8
5.1
5.0
3.5
29
11
8
1
2
1
Middle East and Africa
5.5%
Asia-Pacific
Eastern Europe
4.5%
Western Europe
Latin America
4%
North America
World imports
3%
2.3%
2.1%
2%
1%
0%
-1%
12
13
14
15
* Weights in global GDP at market price, 2013
Source: IHS Global Insight, Euler Hermes
Source: IHS Global Insight, Euler Hermes
3
Six country risk upgrades at end Q1 2014
Netherlands from AA2 to AA1
The economic outlook improved in recent months and growth is
expected to reach +0.9% in 2014 and +1.3% in 2015. Business
insolvencies should stabilise in 2014, albeit at a record high
level. Short-term financing risk remains low as a result of
contained fiscal deficits and interest expenditures, a high current
account surplus and improving banking sector health.
Malta from AA2 to A1
Since 2010, the country has been relatively resilient and GDP
growth should average +2.1% in 2014-15. Financing risk
remains moderate in the next 6 to 12 months but a number of
vulnerabilities weigh on medium-term prospects (public and
external debt, weak banking sector, dependence on tourism and
on semiconductor exports).
Philippines from C3 to B2
The economy’s resilience to external shocks, the high levels of
GDP growth during the past decade, the robust external
position, the substantial improvement in public finances and the
stronger business environment are indicators for a much
improved macro environment.
Sources: Euler Hermes, 31 March 2014 Country Risk Committee.
Romania from C3 to B2
Macro-economic fundamentals have continued to improve
(narrowed current account and fiscal deficits, moderate public
debt) though external debt is still elevated (68% of GDP in 2013,
on a declining trend). EH forecasts growth of around +3% in
2014 and 2015, accompanied by falling business insolvencies.
Algeria from C3 to C2
Current account surpluses, buoyed by large oil and gas
revenues, enable FX accumulation. FX reserves of around
USD190 billion currently provide import cover of over 30 months
and foreign debt obligations (and ratios) remain very low. EH
expects GDP growth of +4.5% and +4% in 2014 and 2015,
respectively, boosted by government spending (including large
infrastructure projects).
Kenya from C3 to C2
Economic diversification away from traditional sectors is actively
promoted. The use of mobile telephony has permitted an
advance in the spread of banking and other financial sector
services. The medium and longer term outlooks are favourable,
reflecting the country’s status as a regional hub and the
prospects provided by energy resources.
4
Our ‘Fragile 10’ on diverging paths
(Update)
While the FED’s tapering hit all
EM, the impact differed...
Fragile 10: Currency depreciation at endJanuary (USD/LCU, %)
Source: IHS Global Insight, Euler Hermes
…depending on perceptions of
countries and countervailing
measures
Fragile 10: Evolution of foreign reserves
since May 2013 to end-January (USD bn)
Source: IHS Global Insight, Euler Hermes
5
One question: Who will finance the
recovery?
Lenders to translate their surpluses
into FDIs
Lenders vs. borrowers
Current account (USD billions)
1 500
Russia
Fragile 10
GIPS countries
Germany
GCC
Asian OECD's
Greater China
United States
FDI (USD, billions)
Germany
GCC
Japan
Greater China
500
400
1 000
Asia
GCC
500
300
Germany
200
0
USA
-500
100
‘Fragile 10’
Southern
European
countries
-1 000
0
-1 500
00
02
04
06
08
10
12
14
-100
05
Sources: IHS Global Insight, Euler Hermes
06
07
08
09
10
Sources: IHS Global Insight, Euler Hermes
11
12
13
14
6
…especially as uneven rebalancing continues
Expected return of portfolio
inflows in the emerging
markets
Inward portfolio flows, EM*, USDbn
*30 big EM countries in Emerging Europe, Latin America,
Emerging Asia, Africa and Middle East
…but investors will continue to
differentiate between countries.
Inward equity flows, YTD, USDbn
Sources: Bloomberg, Euler Hermes
Southern Europe is one of the
winners
Inward portfolio flows, 12 months
cumulated, EURbn
Sources: Eurostat, Euler Hermes
Sources: IIF, Euler Hermes
7
Agenda
1
Growth, Fragility and Financing
2
Political hot spots
3
Economic soft spots
4
Confidence bright spots
8
Hot spot #1: Turkey, policy responsiveness likely
to remain a source of vulnerability
Large current account deficits (8% of GDP
in 2013), mainly financed by short-term
capital inflows, remain a key concern
Current account balance and financing of deficits
(% of GDP)
12%
10%
8%
Net external bank borrowing
Net portfolio inv. inflows
Net FDI inflows
Current account balance
After sharp policy response to Fed tapering
and despite political turmoil the TRY stabilised
but will weigh down on growth (3% in 2014)
Monetary policy, inflation and exchange rate
20%
18%
inflation (y/y; lhs)
monetary policy rate (lhs)
TRY/USD exchange rate (rhs)
3.0
2.8
16%
2.6
14%
2.4
12%
2.2
0%
10%
2.0
-2%
8%
1.8
-4%
6%
1.6
4%
1.4
2%
1.2
6%
4%
2%
-6%
-8%
-10%
0%
-12%
00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Central Bank of Turkey, Euler Hermes
1.0
2008 2009 2010 2011 2012 2013 2014
Source: Central Bank of Turkey, Global Insight, Euler Hermes
9
Hot spot #2: Putinomics, tightrope walking
Investor confidence has
dropped sharply
Net capital inflows/outflows by the
Russian private sector (USD bn)
Current account surplus
continues to narrow
From crisis to conflict: Russia is
likely to be the most impacted
Current account balance
(% of GDP)
Baseline scenario
No further occupation of parts of Ukraine by Russia and thus
no full-blown sanctions on Russia (80% probability)
• Impact on Russia:
•
•
•
•
GDP: +0.7%
Net capital outflows: USD120bn
15% RUB depreciation against a USD+EUR basket
FX reserves: USD400bn
• Impact on the eurozone:
• Contained: -0.1pps of GDP growth through reduced
trade flows and slightly rising non-payment risk
Escalation scenario
Russia intervenes in east and southeast Ukraine. West
imposes substantial economic sanctions (20% probability)
• Impact on Russia:
•
•
•
•
GDP: -2.5%
Net capital outflows: USD200bn
≥ 30% RUB depreciation against a USD+EUR basket
FX reserves: USD300bn
• Impact on the eurozone:
Sources: Central Bank of Russia, Euler Hermes
Sources: Global Insight, Euler Hermes forecasts
• Significant : -0.9pps of GDP growth through reduced
trade flows, reduced investment flows, rising energy
prices (USD130/b)
• Firms’ payment behaviour to deteriorate strongly
(EUR18bn of unpaid invoices at risk)
10
Bonus:
Eurasia - at a crossroads
Countries that have built strong commercial and economic links with western Europe will
benefit from the eurozone recovery. In contrast, those that have remained dependent on
Russia will suffer from the current crisis
Trade with Russia vs Western Europe
Investment flows (inflows and outflows) with
Russia vs eurozone
90
65
Belarus (43%)
Trade with Western Europe (% of total trade)
Kyrgyzstan
45
Ukraine
Tajikistan
Montenegro Georgia
35
Bulgaria
Lithuania
Kazakhstan
Romania
Uzbekistan
Serbia
25
Armenia
Macedonia
Azerbaijan
Czech Republic
Croatia
15
Hungary
Turkmenistan
Albania
Poland
Investment flows with Eurozone (%of total investment flows)
80
55
European Union
Eurasian Economic Commun
Czech Republic
Moldova
European Union
Eurasian Economic Community
Romania
Serbia
Poland
70
Bulgaria
Croatia
Ukraine
Macedonia
60
Kazakhstan
50
Hungary
Lithuania
Finland
40
Moldova
Bosnia and
Herzegovina
Montenegro
Latvia
30
Belarus (63%)
20
Armenia (48%)
Azerbaijan
10
Finland
Kyrgyzstan
0
5
0
0
5
10
15
Trade with Russia (% of total trade)
Sources: IHS Global Insight, Euler Hermes
20
25
5
10
15
Investment flows with Russia (%of total investment flows)
Sources: IHS Global Insight, Euler Hermes
20
25
11
Our Weak 4 did weaken in Q1 2014 (Update)
Russia
• Annexation of Crimea increased geopolitical tensions
• A loss of confidence and continued
market volatility led to capital outflows, a
depreciation of the RUB and a hike in the
key monetary policy interest rate,
weighing on 2014 GDP growth
• Downside risks prevail
Thailand
• Standoff between Thaksin regime and
opponents
• Elections failed to resolve the conflict,
increasing society’s divide
• Despite history of economic growth
during political turmoil, the prolonged
conflict weighs on 2014 growth prospects
Ukraine
• Prospect of large IMF-led international
funding programme (approx. USD27bn)
has reduced immediate risk of balance of
payments crisis and sovereign default
• But big challenges remain: (i) recession
in 2014; (ii) implementation of required
reforms for IMF support; (iii) resolution of
domestic political tensions and standoff
with Russia
Venezuela
• Unorthodox macro-economic policies
have put the country in a very difficult
economic position (inflation >40%, lack
of FX & resulting difficulty in importing)
• Lack of even the most basic goods and
increasing crime send people out on the
streets (esp. middle class), resulting in
partially violent demonstrations
12
Agenda
1
Growth, Fragility and Financing
2
Political hot spots
3
Economic soft spots
4
Confidence bright spots
13
Soft spot #1: Brazil suffers from bottlenecks
and lack of competitiveness
Economic activity to expand by 2.0% in
2014 and 2.5% in 2015, among the
lowest growth rates in the region
Internal (inflation) and external (current
account deficit) macro-economic
imbalances will take time to be tackled
Industrial production and retail sales
(basis 100:01-2005)
Inflation rate and SELIC (%)
16%
200
Inflation rate (end of year)
Retail sales (volume)
180
Monetray policy rate (SELIC)
14%
Industrial Production
12%
160
10%
140
8%
120
6%
100
4%
80
2%
05
06
07
08
Source: IBGE, Euler Hermes
09
10
11
12
13
14
CB inflation target: 4.5% +/-2%
07
08
09
10
11
12
13
14
Source: Central bank of Brazil, Euler Hermes
14
Bonus:
Latin America - It is all about attractiveness!
Regional growth will remain weak in 2014
(2.6%), before picking-up moderately in
2015 (3.0%)…still below pre-crisis rates
The tax burden remains one hurdle
limiting growth
Selected countries: Real GDP growth
forecasts 2014-15 and country risk level
Lower tax burden
Higher tax burden
6.0
Peru
5.0
Venezuela:
0.0%
Colombia:
0.3%
4.3%
Colombia
4.4%
Peru:
5.6%
6.0%
Brazil:
2.0%
2.5%
Real growth (%, 2014)
Mexico:
3.3%
3.9%
4.0
Chile
Mexico
Worse
growth
prospects
3.0
2.0
Better
growth
prospects
Brazil
Argentina
1.0
Chile:
3.7%
4.0%
Argentina:
1.7%
2.5%
0.0
Venezuela
-1.0
20
Source: Country Risk Level as of March 31, 2014, Euler Hermes
40
60
80
100
120
Tax rate for corporates (% of commercial profits, 2013)
Source: WDI – World Bank, Euler Hermes
15
Soft spot #2: India needs to build strong
macro-financial foundations
Impact of Rajanomics:
Stabilising prices + reducing external imbalances + improving confidence
Monetary policy and inflation
Current account and exchange rate
Inflation (rhs)
Policy rate (lhs)
14%
14%
13%
13%
12%
12%
4%
65
Current account (lhs)
3%
Exchange rate (rhs)
69
60
2%
Manufacturing
PMI
64
55
1%
11%
Business confidence
Services PMI
11%
0%
10%
50
10%
59
-1%
9%
9%
8%
45
-2%
8%
7%
7%
6%
6%
5%
5%
4%
07
08
09
10
11
12
13
14
Sources: IHS Global insight, Bloomberg, Euler Hermes
-3%
54
40
-4%
49
35
-5%
-6%
30
02
04
06
08
10
12
Sources: IHS Global insight, Euler Hermes
14
44
12
13
14
Sources: Bloomberg, Euler Hermes
16
Soft spot #3: South Africa and Nigeria, who
leads Sub-Saharan Africa?
Nigeria’s GDP new methodology:
services now account for half of the
country’s GDP.
Attractiveness and regional integration of
Nigeria and South Africa in 2012
Nigeria released a new methodology to estimate its GDP on April 6th 2014.
“Nigeria old” shows the former GDP estimates and “Nigeria new” shows the new
estimates given by the government of Nigeria.
Sources: Nigeria National Bureau of Statistics, World Bank, Euler Hermes
Regional
integration
Business
attractiveness
Financial
attractiveness
Sector’s share of GDP
Revised GDP
estimates 2013:
Nigeria USD510bn
(vs USD292bn
previously),
South Africa
USD350bn
South Africa remains more attractive
for business and keeps its regional
leadership
Nigeria
(based on
new data for
GDP)
South Africa
Domestic credit to private
sector (% of GDP)
11.9%
151.1%
Credit depth of information
index (0=low to 6=high)
5
6
GDP per capita USD
2 688.8
7 314.1
Rule of law, CPIA index
(-2.5=low to +2.5=high)
-1.18
0.08
1
Regional trade agreements
(ECOWAS)
Ratio trade Africa / World
8.5%
3
(SACU /
SADC / ECSouth Africa)
12.6%
Sources: Nigeria National Bureau of Statistics, World Bank, WTO, Chelem, Euler
Hermes
17
Soft spot #4: Europe’s core, chink in the armour?
Germany (1)
Problem #1: Intra-zone
Input prices (wages, energy costs)
increase while deflationary
pressures on prices prevail
PPI (Germany) vs CPI (eurozone), y/y, %
57% of German exports
go to the EU-27 o.w.
30% go to France,
Netherlands, Italy,
Belgium and Spain.
Problem #2: Extra-zone
High competition with Japan
and to a lesser extent the U.S.
but the euro is too strong…
Real effective exchange rate
Sources: Global Insight, Euler Hermes
…and wages are increasingly
dynamic
Manufacturing hourly earnings index
Sources: Global Insight, Euler Hermes
18
Soft spot #4: Europe’s core, chink in the armour?
France (2)
Short-term growth drivers could stall (such
as consumption), longer-term ones still
subdued (including investment)
Who-wants-to-be-a-millionaire question: Can
France grow without public spending?
France’s Stability Pact: Wishful thinking?
France
po ids
2012
2013
2014
2015
GDP
100%
0.0
0.3
0.7
1.2
Consumer Spending
58%
-0.3
0.4
0.3
1.0
Public Spending
25%
1.4
1.8
1.3
0.8
Investment
19%
-1.2
-2.1
0.2
0.7
0%
-0.9
0.1
0.1
0.1
Exports
28%
2.5
0.8
1.8
2.5
Imports
29%
-0.9
0.8
1.4
1.8
-1%
1.0
0.0
0.1
0.2
-45
-27
-28
-25
-2.2
-1.3
-1.3
-1.2
-72
-62
-57
-52
Trade b alance (% of GDP)
-3.5
-3.0
-2.7
-2.5
Employment
-0.3
-0.6
-0.1
0.3
Unemployment rate
9.8
10.3
10.2
10.1
Wages
0.9
1.0
1.0
1.1
Stocks
*
Net exports
*
Current account
**
Current account (% of GDP)
Trade balance
**
Inflation
General government balance
**
2.0
0.9
0.9
1.2
-96
-87
-80
-69
General government b alance (% of GDP)
-4.8
-4.3
-3.9
-3.3
Public debt (% of GDP)
91.7
94.1
96.1
96.6
2 032
2 061
2 091
2 138
Nominal GDP
**
Change o ver the perio d, unless o therwise
indicated: * co ntributio n to GDP gro wth
** euro billio ns
Source : Ministry of Finance, Euler Hermes
19
Agenda
1
Growth, Fragility and Financing
2
Political hot spots
3
Economic soft spots
4
Confidence bright spots
20
Bright spot #1: The United States will
improve in the Spring?
… but a spring rebound is expected.
Private consumption and investment
should boost GDP growth to 2.8% in 2014
Severe winter weather damaged
economic activity in Q1…
Selected advanced indicators for the US
GDP growth and contribution to GDP growth
60
Private consumption
Public consumption
Net exports
2
5
55
1
4.1
2.4
4
Investment
Stocks
GDP
3.0
3.2
Q2-14
Q3-14
3.4
3
1.9
50
0
2
1
45
-1
0
Manufacturing PMI index
-1
Retail sales (m/m, %)
40
-2
2012
2013
Sources: IHS Global Insight, Euler Hermes
2014
-2
Q3-13
Q4-13
Q1-14
Q4-14
Sources: IHS Global Insight, Euler Hermes
21
Bright spot #2: China to unwind savings
The power of saving
Cheap labour costs and high
productivity growth model
losing steam
Domestic saving rates
60
Wages an productivity
700
50
China 2.0: becoming lender
and consumer
FDI and consumer goods imports
10%
Hourly wage rate (manufacturing)
Foreign Direct
Investment Position in
US (millions USD, rhs)
Productivity
Consumer goods
imports (share of total
imports, lhs)
9000
8000
600
40
500
30
7000
9%
6000
5000
20
400
4000
10
300
8%
3000
0
2000
200
1000
7%
100
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Sources: IHS Global Insight, Euler Hermes
Sources: Bloomberg, Euler Hermes
0
03 04 05 06 07 08 09 10 11 12 13 14
Sources: Eurostat, Euler Hermes
22
Bonus:
Japan - When it is just about confidence
Mixed impact of Abenomics: inflation is
picking up, but no clear improvement in
wages
Private confidence on diverging trends
Inflation and wages
Business and consumer confidence
3
PMI manufacturing (left scale)
60
2
Consumer confidence (right scale)
55
55
1
50
50
0
45
45
40
-1
40
-2
CPI inflation (y/y)
-3
60
Scheduled cash
earnings (y/y)
-4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Sources: Bloomberg, IHS Global Insight, Euler Hermes
35
35
30
30
25
25
20
2006 2007 2008 2009 2010 2011 2012 2013 2014
Sources: IHS Global Insight, Euler Hermes
23
Bright spot #3: GCC, the ultimate money-spinners?
High growth in GCC countries,
giving additional resources to
sovereign wealth funds
Growth rates in GCC and in the
average of the Middle-East region
Sources: IHS Global Insight, Euler Hermes
GCC have important
sovereign wealth funds…
Sovereign Wealth Funds (USDbn)*
*Based on published data, which may be incomplete
Sources: IHS Global Insight, Euler Hermes
… investing in Europe, but also
in other GCC countries and
elsewhere in the Middle East
FDIs from GCC countries to selected
economies (2012 stock, % of total FDI)
Sources: IHS Global Insight, Euler Hermes
24
Bright spot #4: How shiny is life after
austerity in southern eurozone? (1)
Real exports, Q1 2008 = 100
Sources: IHS Global Insight, Euler Hermes forecasts
…and credit to non-financial
corporations continues to
contract
But long-lasting low inflation
due to painful adjustments is
a high risk…
Signs of pick up in exports
due to competitiveness gains
Inflation rate, %
Credit to NFC, y/y, %
Outlook
2012
2013
2014
2015
Germany
2.0
1.5
1.2
1.5
France
2.0
0.9
0.9
1.2
2.0
Italy
3.0
1.2
1.0
1.2
1.0
Spain
2.4
1.5
0.7
1.0
1.0
Netherlands
2.8
2.5
1.1
1.7
2.0
Belgium
2.6
1.1
1.0
1.4
2.0
Austria
2.5
2.0
1.6
1.9
3.0
Greece
1.0
-0.9
-0.5
0.6
1.0
Portugal
2.8
0.4
0.7
0.9
1.0
Eurozone
2.3
1.3
1.0
1.3
2.0
Sources: Eurostat, Euler Hermes forecasts
3.0
Sources: ECB, Euler Hermes
25
Bonus:
Renzimania - Will charm survive tough reforms?
The ‘Renzi effect’: accelerating
business confidence and return
of portfolio flows
Economic Sentiment vs. portfolio
flows
Act 1: gain political support
and give a modest boost to
growth
Act 2: more still needs to be
done to support credit and
ease fiscal pressure on firms
Estimated impact of Renzi reform
package
GDP growth
(pps)
Fiscal deficit
(% of GDP)
GDP growth:
2014: +0.4%
2015: +0.9%
Source: Eurostat, Euler Hermes
Fiscal deficit:
2014: -3.1%
2015: -2.5%
26
Source: Euler Hermes
Bright spot #4: … and the UK (2)
Consumer spending
recovered rapidly as a result
of the improving labour
market
Less fiscal burden for companies
and still low interest rates will
support investment
Real GDP and components
Total tax rate,
% of commercial profits
Economic policies to
remain supportive
• Further cuts in corporate tax
(-1pps to 20% in April 2015 after
a 2pps cut in April 2014, the
lowest rate within the G20).
• BoE to support banks that extend
loans to exporting firms.
• Increase in infrastructure
spending (EUR3bn per year).
• EUR1.6bn for financing in 11
strategic industries (auto,
aerospace, construction, housing).
• New shale gas field allowance
and reduction of the effective tax
rate on shale gas production.
N.B.: Domestic demand includes private consumption,
total investment and inventories
Sources: World Bank, Euler Hermes
• Abolish stamp duty (currently
at a rate of 0.5%) on transfers of
shares of UK companies listed
on growth markets in April 2014.
Sources: IHS Global Insight, Euler Hermes
27
Thank you for your
attention!
Economic Research Department
Euler Hermes Group
1 place des Saisons
92048 Paris La Défense Cedex
France
Phone +33 01 84 11 50 50
[email protected]
http://www.eulerhermes.com/economicresearch
This material is published by Euler Hermes SA, a Company of Allianz, for information purposes only
and should not be regarded as providing any specific advice. This publication and its contains are
proprietary to Euler Hermes SA. Euler Hermes and Euler Hermes’ logo are trademarks or registered
trademarks belonging to Euler Hermes Group, Worldwide Recipients should make their own
independent evaluation of this information and no action should be taken, solely relying on it. This
material should not be reproduced or disclosed without our consent. It is not intended for distribution in
any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has
not been independently verified by Euler Hermes and Euler Hermes makes no representation or
warranty (express or implied) of any kind, as regards the accuracy or completeness of this information,
nor does it accept any responsibility or liability for any loss or damage arising in any way from any use
made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or
estimates are solely those of the Euler Hermes Economics Department, as of this date and are subject
to change without notice. The classification of this document is PUBLIC. Euler Hermes SA. Registered
in Nanterre (552 040 594).Euler Hermes SA is authorized and regulated by the Financial Markets
Authority of France. © Copyright 2014 Euler Hermes. All rights reserved