Titre de la présentation
GLOBAL MONETARY and ECONOMIC OUTLOOK with a focus on EUROLAND
Philadelphia, June 2009
Philippe D’ARVISENET, Global Chief Economist, Economic Research Department
THE CONTEXT The worse recession since WW2
It is synchronized and comes with a financial crisis, both make things worse
Deficit countries and surplus countries are equally affected as a result of the unwinding of global imbalances
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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Is the worst behind :
The financial crisis is not over
Distinguish first and second derivatives
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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Headwinds that mitigate (or will) and tailwinds getting stronger
Inventories adjustment
Oil prices
Housing sector
Interest rates
Fiscal policy
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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But ingredients for disappointment still lie ahead
Lagging variables : employment, defaults...
The consolidation of households balance sheets... will take time and keep a drag on growth
Limits of fiscal stimulus
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Inflation or deflation : you can’t fear both simultaneously Output gap and unemployment up globally
They are to keep exerting a downward pressure on underlying inflation Central Banks can’t follow a Taylor rule that would suggest a policy rate of 5%! Shift to unorthodox measures : credit easing / quantitative easing Too much money doesn’t always chase too few goods (money multiplier drops) Central banks exit strategy
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chart 1
DECOUPLING WAS JUST A DREAM
Real GDP annual growth, % 8 Developing countries
6
World 4
2
0
-2 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 0708e09f sources: IMF, BNPParibas Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 2
Interest rate spread, basis points 350 300
Euribor 3m - ECB's Repo rate
250
Libor $ 3m - Fed Funds target
200 150 100 50 0 -50 99
00
01
02
03
04
05
06
07
08
09
sources: ECB, Federal Reserve,BBA Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 3
FINANCIAL CHANNELS
Europe, iTraxx Main (on-the-run) 250 S2
S3
S4
S5
S6
S7
S8
S9
S10
S11
07-06
01-07
07-07
01-08
07-08
01-09
200
150
100
50
0 01-05 07-05 source: BNP Paribas
01-06
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 4
FINANCIAL CHANNELS
Europe, iTraxx Crossover (on-the-run) 1400 S2
S3
S4
S5
07-05
01-06
07-06
S6
S7
S8
S9
S10
01-07
07-07
01-08
07-08
01-09
S11
1200 1000 800 600 400 200 0 01-05
source: BNP Paribas
Philippe D’Arvisenet, Global Chief Economist
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chart 5
FINANCIAL CHANNELS : REASSESSMENT IN RISK AFFECTED EUROLAND
10-year interest rate spread, basis points 160 France - Germany
140
Italy - Germany
120
Spain - Germany 100 80 60 40 20 0 -20 99
00
01
02
03
04
05
06
07
08
09
source: Reuters Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 6
FINANCIAL CHANNELS
Senior 5 year CDS, basis points
900 800
Poland
700 Hungary 600 500
Romania
400
Lithuania
300
Slovakia
200
Czech Republic
100 0 2005
2006
2007
2008
2009
source: CMA Philippe D’Arvisenet, Global Chief Economist
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June 2009
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EUROLAND The drop in activity has been more impressive than in the US, with differences across countries (Spain, Germany, etc..) both in magnitude and the drivers (exports and industry, housing sector) Headwinds: labor market, incomes, financing conditions, level of debt... Disinflation and the risk of deflation Monetary policy: did rates hit the bottom? ECB balance sheet to keep increasing? Towards quantitative easing? Fiscal policy : not as aggressive as in the US ... but automatic stabilizers are more important, margins of maneuver differ across countries.
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 7
EUROLAND IN A DEEP RECESSION
Real GDP growth, y/y % 6 4 2 0 Germany
-2
France
-4
Italy
-6
Spain
-8 92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
source: Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 8
Exports of G&S, volume, y/y % 20 15 10 5 0 -5
Germany France
-10
Italy
-15
Spain
-20 92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
source: Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 9
Household consumption, volume, y/y % 8 6 4 2 0 Germany
-2
France Italy
-4
Spain
-6 92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
source: Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 10
Euro zone: composite PMI and real GDP growth
65
2
60
1
Real GDP, q/q , % 55
0 50 -1
Composite PMI
45
-2
40 35
-3 98
99
00
01
02
03
04
05
06
07
08
09
sources: NTC, Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 11
6
Euro zone: employment & real GDP growth, y/y %
4 GDP 2 0 Employment
-2 -4 -6
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 sources: Eurostat, OECD Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 12
EMPLOYMENT TO CONTRACT
Euro zone: labour market 12 10 Unemployment rate, % 8 6 4 Total employment, y/y % 2 0 -2 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 source: Eurostat Philippe D’Arvisenet, Global Chief Economist
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chart 13
Euro zone: household debt as % disposable income 85
6
80 4 75 2 70 year(i) - year(i-1)
0
65 actual -2
60 99
00
01
02
03
04
05
06
07
08
sources: ECB, Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 14
Euro zone: wages growth & unemployment change 4 3
Nominal wages, y/y %
2 1 0
Unemployment rate, annual change, % (2-year lagged)
-1 -2 96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
sources: ECB, Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 15
Housing starts, index 01/95=100 300 (1-year moving average)
Germany
250
France Spain
200 150 100 50 0 95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
sources: Buba, Insee, Ine Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 16
Real estate price, indice Q1/1997 = 100
320
Spain 280 France 240 200 USA 160 120 Germany 80 97
98
99
2000
01
02
03
04
05
06
07
08
09
sources: Ministerio de Economia, Insee, EFHEO, Bundesbank Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 17
Euro zone, consumer surveys: economic situation & purchases 5
-10
0
-12
-5 -14 -10 -15
-16
-20
-18
-25 -30 -35
-20
Major purchases over next 12 months
-22
Economic situation over next 12 months
-40
-24
-45
-26 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
source: European Commission Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 18
Euro zone: unit labour cost and GDP deflator 5 (y/y % change)
Unit labour cost 4
Labour productivity GDP deflator
3 2 1 0 -1 -2 96
97
98
99
00
01
02
03
04
05
06
07
08
09
sources: ECB, Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 19
Euro zone: gross operating surplus of nonfinancial corporations 4
41 (as % of gross value added of the sector) Net saving
3
40 Gross operating surplus 39
2
38
1
37
0 99
00
01
02
03
04
05
06
07
08
09
source: ECB Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 20
Non residential investment, volume, y/y % 15 France
12 9
Euro zone
6 3 0 -3 -6 Germany
-9 -12 92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
source: OECD Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 21
Euro zone: real growth of exports & imports, y/y % 15 10 5 Exports of G&S
0
Imports of G&S
-5 -10 -15 -20 96
97
98
99
00
01
02
03
04
05
06
07
08
09
source: Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 22
Euro zone: ECB policy rates and inflation 5
ECB short-term repo rate
4 Total inflation
3 2 Core inflation
1
ECB deposit rate
0 -1 1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
sources: Eurostat, ECB
Philippe D’Arvisenet, Global Chief Economist
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chart 23
Euro zone: labour productivity & real GDP growth, y/y % 6 4
Real GDP
2 0
Labour productivity
-2 -4 -6 96
97
98
99
00
01
02
03
04
05
06
07
08
09
sources: ECB, Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 24
Euro zone: labour cost and productivity 5 (y/y % change)
4 3 2 1 0
Unit labour cost -1
Labour productivity Compensation/employee
-2 96
97
98
99
00
01
02
03
04
05
06
07
08
09
sources: ECB, Eurostat Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 25
Euro zone: OATei 5 4
Inflation rate, y/y %
3 2 1
OATei 10-year, breakeven inflation (long-term inflation expectation)
0 -1 01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
sources: ECB, Reuters Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 26
Euro zone: inflation & consumer surveys 6 5
75
Inflation, y/y %
Prices: last 12 months*
60
4 45 3 30 2 15 1
Prices: next 12 months*
0
0 -15
-1 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 sources: Eurostat, * European Commission (Consumer surveys)
Philippe D’Arvisenet, Global Chief Economist
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chart 27
Euro zone: labour & equipment shortages 16 14 Equipment shortage, % 12 10 8 6 4 2 Labour shortage, % 0 85
87
89
91
93
95
97
99
01
03
05
07
09
June 2009
|
source: European Commission surveys Philippe D’Arvisenet, Global Chief Economist
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chart 28
Euro zone: monetary aggregates & real GDP growth, y/y % 15 M1 12 9 M3
6
Real GDP 3 0 -3 -6 99
00
01
02
03
04
05
06
07
08
09
sources: Eurostat, ECB
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 29
HEADWINDS : CREDIT TO HOUSEHOLD SECTOR
Euro zone: MFI loans, annual growth rate (%) 16
to nonfinancial corporations
14 12
to households: housing loans
10 8 6 4
to households: consumer credit
2 0 -2 00
01
02
03
04
05
06
07
08
09
source: ECB
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 30
... DEMAND ON A DOWNWARD TREND
Euro zone: demand of bank loans from enterprises 40 (net balance of opinions, %)
30
expected
20 10 0 -10 recent -20 -30 -40 2003
2004
2005
2006
2007
2008
2009
source: ECB (Bank Lending Survey) Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 31
Euro zone: approval of bank loans to enterprises 70 (net balance of opinions, tightening - loosening %)
60
recent
50 40 30 20 10
expected
0 -10 -20 2003
2004
2005
2006
2007
2008
2009
source: ECB (Bank Lending Survey) Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 32
Breakdown of ECB's total financial assets (level, billion EUR) 2100 Others
1800 1500
LT refinancing operations Main refinancing operations
1200 900 600 300 0 2005
2006
2007
2008
2009
source: ECB Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 33
EUR/USD exchange rate and effective exchange rate index 20
1,6
USD effective exchange rate index, y/y %
16
EUR/USD exchange rate
1,5
12
1,4
8
1,3
4 1,2 0 1,1
-4
1,0
-8 EUR effective exchange rate index, y/y %
-12
0,9
-16
0,8 94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
sources: Reuters, Réserve fédérale et BCE Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 34
US vs Germany: 10-year government bond rate, % 7 USA 6
5 Euro zone
4
3
2 99
00
01
02
03
04
05
06
07
08
09
source: Datastream Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 35
FISCAL DEFICITS ... ON THE WAY UP
Eurozone: budget balance & public debt, % of GDP 0
85
-2
80
Budget balance
-4
75
Public debt
-6
70
-8
65 95
96
97
98
99
00
01
02
03
04
05
06
07
08e 09f 10f
sources: Eurostat, European Commission Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 36
Fiscal balance as % of GDP 5 2008
2009
2010
0
Finland -5
Italy Germany
Netherlands Portugal
France -10
Spain
source: European Commission Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 37
Gross debt as % of GDP 120
Italy 2008
2009
2010
100 France 80
Portugal
Germany Spain
Netherlands
60 Finland 40
20
0 source: European Commission Philippe D’Arvisenet, Global Chief Economist
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June 2009
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chart 38
Trade of goods & services: real annual growth, % 15 10 5 0 -5
World Germany
-10
France -15 -20 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09f 10f sources: IMF, Buba, Insee Philippe D’Arvisenet, Global Chief Economist
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June 2009
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Economic Research Department Philippe d'ARVISENET Chief Economist
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Caroline NEWHOUSE-COHEN Country economics
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UNITED STATES, CANADA Jean-Marc LUCAS
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JAPAN, AUSTRALIA, NEW ZEALAND Caroline NEWHOUSE-COHEN
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EURO ZONE, ITALY, EURO ZONE LABOUR MARKET Clemente De LUCIA
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FRANCE, EURO ZONE PUBLIC FINANCES Frédérique CERISIER
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GERMANY, AUSTRIA, SWITZERLAND, EU ENLARGEMENT Catherine STEPHAN
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SPAIN, PORTUGAL, GREECE Philippe SABUCO
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UNITED KINGDOM, NORDIC COUNTRIES, BENELUX, PENSIONS, LONG TERM FORECASTS Raymond VAN DER PUTTEN
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OECD COUNTRIES Philippe d'ARVISENET
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BANKING ECONOMICS Laurent QUIGNON Head
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Céline CHOULET Philippe SABUCO
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COUNTRY RISK Guy LONGUEVILLE Head
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ASIA Delphine CAVALIER Christine PELTIER
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LATIN AMERICA Sylvain BELLEFONTAINE Valérie PERRACINO
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AFRICA Stéphane ALBY Jean-Loïc GUIEZE
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EASTERN EUROPE Alexandre VINCENT
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RUSSIA, FORMER SOVIET REPUBLICS Anna DORBEC
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MIDDLE EAST – SCORING Pascal DEVAUX
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François FAURE Capital flows to emerging markets,Turkey
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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O u r p u b lic a tio n s
e c o n o m ic -r e s e a r c h .b n p p a r ib a s .c o m
C O N J O N C T U R E fo c u s e s e a c h m o n th b o th o n th e m a in e c o n o m ic is s u e s a n d s tr u c tu r a l p r o b le m s .
E C O N O M IC M A R K E T M O N IT O R p r o v id e s a d e ta ile d d e v e lo p m e n t s in O E C D c o u n t r ie s ( 8 is s u e s p e r y e a r ) .
f o llo w - u p
o f th e
e c o n o m ic
s itu a tio n
w h ils t a n a ly s in g
in te r e s t a n d
exchange
ra te
E C O W E E K f o c u s e s o n s p e c if ic a n d c u r r e n t e c o n o m ic is s u e s ( e v e r y F r id a y ) .
E C O F L A S H r e le a s e .
c o m m e n t s a n d a n a ly s e s t h e m a in e c o n o m ic e v e n t s ( d a t a r e le a s e s , e c o n o m ic p o lic y d e c is io n s ) in t h e h o u r s f o llo w in g t h e ir
E C O T V t h e m o n t h ly b r o a d c a s t p r o g r a m m e f r o m B N P P a r ib a s e c o n o m is t s . E a c h m o n t h , P h ilip p e d 'A r v is e n e t a n d h is t e a m s w ill h e lp y o u t o m a k e s e n s e o f th e e c o n o m ic a n d fin a n c ia l n e w s in b o th F r e n c h a n d E n g lis h . T h e s e in te r v ie w s a r e a v a ila b le o n o u r w e b s ite .
T o r e c e iv e o u r p u b lic a tio n s , p le a s e s u b s c r ib e o n o u r w e b s ite B N P P a r ib a s is in c o r p o r a te d in F r a n c e w it h L im ite d L ia b ility . R e g is te r e d O ffic e 1 6 b o u le v a r d d e s It a lie n s , 7 5 0 0 9 P a r is . B N P P a r ib a s is r e g u la t e d b y t h e F S A f o r t h e c o n d u c t o f its d e s ig n a te d in v e s tm e n t b u s in e s s in t h e U K a n d is a m e m b e r o f t h e L o n d o n S t o c k E x c h a n g e . B N P P a r ib a s L o n d o n B r a n c h is r e g is te r e d in E n g la n d a n d W a le s u n d e r N o . F C 1 3 4 4 7 . T e l: + 4 4 ( 0 ) 2 0 7 5 9 5 2 0 0 0
F a x : + 4 4 (0 )2 0 7 5 9 5 2 5 5 5
R e g is t e r e d O ffic e : 1 0 H a r e w o o d A v e n u e , L o n d o n N W 1 6 A A
w w w .b n p p a r ib a s .c o m
T h e in f o r m a tio n a n d o p in io n s c o n t a in e d in t h is r e p o r t h a v e b e e n o b t a in e d fr o m p u b lic s o u r c e s b e lie v e d t o b e r e lia b le , b u t n o r e p r e s e n t a tio n o r w a r r a n ty , e x p r e s s o r im p lie d , is m a d e t h a t s u c h in fo r m a tio n is a c c u r a t e o r c o m p le t e a n d it s h o u ld n o t b e r e lie d u p o n a s s u c h . T h is r e p o r t d o e s n o t c o n s tit u t e a p r o s p e c t u s o r o t h e r o ff e r in g d o c u m e n t o r a n o ff e r o r s o lic ita tio n t o b u y a n y s e c u r itie s o r o th e r in v e s tm e n t. In f o r m a tio n a n d o p in io n s c o n ta in e d in t h e r e p o r t a r e p u b lis h e d f o r th e a s s is ta n c e o f r e c ip ie n ts , b u t a r e n o t t o b e r e lie d u p o n a s a u t h o r it a tiv e o r ta k e n in s u b s titu tio n fo r t h e e x e r c is e o f ju d g e m e n t b y a n y r e c ip ie n t, th e y a r e s u b je c t t o c h a n g e w it h o u t n o tic e a n d n o t in t e n d e d to p r o v id e th e s o le b a s is o f a n y e v a lu a tio n o f th e in s tr u m e n ts d is c u s s e d h e r e in . A n y r e f e r e n c e t o p a s t p e r f o r m a n c e s h o u ld n o t b e t a k e n a s a n in d ic a tio n o f fu t u r e p e r f o r m a n c e . N o B N P P a r ib a s G r o u p C o m p a n y a c c e p ts a n y lia b ility w h a ts o e v e r f o r a n y d ir e c t o r c o n s e q u e n tia l lo s s a r is in g fr o m a n y u s e o f m a t e r ia l c o n t a in e d in th is r e p o r t. A ll e s tim a te s a n d o p in io n s in c lu d e d in t h is r e p o r t c o n s tit u t e o u r ju d g e m e n ts a s o f t h e d a t e o f th is r e p o r t. B N P P a r ib a s a n d t h e ir a f filia te s ( “c o lle c tiv e ly “B N P P a r ib a s ” ) m a y m a k e a m a r k e t in , o r m a y , a s p r in c ip a l o r a g e n t, b u y o r s e ll s e c u r itie s o f t h e is s u e r s m e n tio n e d in t h is r e p o r t o r d e r iv a tiv e s th e r e o n . B N P P a r ib a s m a y h a v e a fin a n c ia l in te r e s t in th e is s u e r s m e n tio n e d in th is r e p o r t, in c lu d in g a lo n g o r s h o r t p o s itio n in t h e ir s e c u r itie s , a n d o r o p tio n s , fu t u r e s o r o t h e r d e r iv a tiv e in s tr u m e n ts b a s e d t h e r e o n . B N P P a r ib a s , in c lu d in g its o f fic e r s a n d e m p lo y e e s m a y s e r v e o r h a v e s e r v e d a s a n o ffic e r , d ir e c t o r o r in a n a d v is o r y c a p a c ity f o r a n y is s u e r m e n tio n e d in th is r e p o r t. B N P P a r ib a s m a y , fr o m tim e to tim e , s o lic it, p e r f o r m o r h a v e p e r f o r m e d in v e s tm e n t b a n k in g , u n d e r w r itin g o r o th e r s e r v ic e s ( in c lu d in g a c tin g a s a d v is e r , m a n a g e r , u n d e r w r it e r o r le n d e r ) w ith in t h e la s t 1 2 m o n t h s f o r a n y is s u e r r e f e r r e d to in th is r e p o r t. B N P P a r ib a s , m a y t o t h e e x t e n t p e r m itte d b y la w , h a v e a c te d u p o n o r u s e d th e in f o r m a tio n c o n ta in e d h e r e in , o r t h e r e s e a r c h o r a n a ly s is o n w h ic h it w a s b a s e d , b e fo r e its p u b lic a tio n . B N P P a r ib a s m a y r e c e iv e o r in te n d t o s e e k c o m p e n s a tio n fo r in v e s tm e n t b a n k in g s e r v ic e s in th e n e x t th r e e m o n t h s fr o m a n is s u e r m e n tio n e d in th is r e p o r t. A n y is s u e r m e n tio n e d in th is r e p o r t m a y h a v e b e e n p r o v id e d w it h s e c tio n s o f th is r e p o r t p r io r t o its p u b lic a tio n in o r d e r t o v e r if y its fa c tu a l a c c u r a c y . T h is r e p o r t w a s p r o d u c e d b y a B N P P a r ib a s G r o u p C o m p a n y . T h is r e p o r t is fo r t h e u s e o f in t e n d e d r e c ip ie n ts a n d m a y n o t b e r e p r o d u c e d ( in w h o le o r in p a r t) o r d e liv e r e d o r tr a n s m itte d to a n y o t h e r p e r s o n w ith o u t th e p r io r w r itt e n c o n s e n t o f B N P P a r ib a s . B y a c c e p tin g t h is d o c u m e n t y o u a g r e e t o b e b o u n d b y th e f o r e g o in g lim ita tio n s . A n a ly s t C e r tific a tio n E a c h a n a ly s t r e s p o n s ib le f o r t h e p r e p a r a tio n o f th is r e p o r t c e r tifie s t h a t ( i) a ll v ie w s e x p r e s s e d in t h is r e p o r t a c c u r a t e ly r e fle c t th e a n a ly s t’s p e r s o n a l v ie w s a b o u t a n y a n d a ll o f t h e is s u e r s a n d s e c u r itie s n a m e d in th is r e p o r t, a n d ( ii) n o p a r t o f th e a n a ly s t’s c o m p e n s a tio n w a s , is , o r w ill b e , d ir e c tly o r in d ir e c tly , r e la t e d to t h e s p e c ific r e c o m m e n d a tio n s o r v ie w s e x p r e s s e d h e r e in . U n it e d S t a te s : T h is r e p o r t is b e in g d is tr ib u te d t o U S p e r s o n s b y B N P P a r ib a s S e c u r itie s C o r p . , o r b y a s u b s id ia r y o r a ffilia t e o f B N P P a r ib a s t h a t is n o t r e g is t e r e d a s a U S b r o k e r - d e a le r , to U S m a jo r in s tit u tio n a l in v e s t o r s o n ly . B N P P a r ib a s S e c u r itie s C o r p ., a s u b s id ia r y o f B N P P a r ib a s , is a b r o k e r - d e a le r r e g is t e r e d w it h th e S e c u r itie s a n d E x c h a n g e C o m m is s io n a n d is a m e m b e r o f th e N a tio n a l A s s o c ia tio n o f S e c u r itie s D e a le r s , In c . B N P P a r ib a s S e c u r itie s C o r p . a c c e p ts r e s p o n s ib ility fo r t h e c o n t e n t o f a r e p o r t p r e p a r e d b y a n o th e r n o n - U S a f filia te o n ly w h e n d is t r ib u t e d to U S p e r s o n s b y B N P P a r ib a s S e c u r itie s C o r p . U n it e d K in g d o m : T h is r e p o r t h a s b e e n a p p r o v e d f o r p u b lic a tio n in th e U n it e d K in g d o m b y B N P P a r ib a s L o n d o n B r a n c h , a b r a n c h o f B N P P a r ib a s w h o s e h e a d o f fic e is in P a r is , F r a n c e . B N P P a r ib a s L o n d o n B r a n c h is r e g u la t e d b y th e F in a n c ia l S e r v ic e s A u th o r ity ( “F S A ” ) fo r t h e c o n d u c t o f its d e s ig n a t e d in v e s tm e n t b u s in e s s in t h e U n ite d K in g d o m a n d is a m e m b e r o f th e L o n d o n S to c k E x c h a n g e . T h is r e p o r t is p r e p a r e d f o r p r o f e s s io n a l in v e s t o r s a n d is n o t in t e n d e d fo r P r iv a te C u s t o m e r s in t h e U n ite d K in g d o m a s d e fin e d in F S A r u le s a n d s h o u ld n o t b e p a s s e d o n t o a n y s u c h p e r s o n s . J a p a n : T h is r e p o r t is b e in g d is tr ib u te d t o J a p a n e s e b a s e d fir m s b y B N P P a r ib a s S e c u r itie s ( J a p a n ) L im it e d , T o k y o B r a n c h , o r b y a s u b s id ia r y o r a ffilia te o f B N P P a r ib a s n o t r e g is t e r e d a s a s e c u r itie s fir m in J a p a n , to c e r t a in fin a n c ia l in s titu tio n s p e r m itt e d b y r e g u la tio n . B N P P a r ib a s S e c u r itie s ( J a p a n ) L im ite d , T o k y o B r a n c h , a s u b s id ia r y o f B N P P a r ib a s , is a s e c u r itie s fir m r e g is t e r e d a c c o r d in g to t h e S e c u r itie s & E x c h a n g e L a w o f J a p a n a n d a m e m b e r o f t h e J a p a n S e c u r itie s D e a le r s A s s o c ia tio n . B N P P a r ib a s S e c u r itie s ( J a p a n ) L im ite d , T o k y o B r a n c h a c c e p ts r e s p o n s ib ility f o r t h e c o n te n t o f a r e p o r t p r e p a r e d b y a n o t h e r n o n - J a p a n a ffilia t e o n ly w h e n d is tr ib u t e d t o J a p a n e s e b a s e d fir m s b y B N P P a r ib a s S e c u r itie s ( J a p a n ) L im it e d , T o k y o B r a n c h . H o n g K o n g : T h is r e p o r t is b e in g d is tr ib u te d in H o n g K o n g b y B N P P a r ib a s H o n g K o n g B r a n c h , a b r a n c h o f B N P P a r ib a s w h o s e h e a d o ffic e is in P a r is , F r a n c e . B N P P a r ib a s H o n g K o n g B r a n c h is r e g u la t e d a s a L ic e n s e d B a n k b y th e H o n g K o n g M o n e t a r y A u th o r ity a n d is d e e m e d a s a R e g is t e r e d I n s titu tio n b y t h e S e c u r itie s a n d F u tu r e s C o m m is s io n fo r th e c o n d u c t o f A d v is in g o n S e c u r itie s [R e g u la te d A c tiv ity T y p e 4 ] u n d e r t h e S e c u r itie s a n d F u t u r e s O r d in a n c e T r a n s itio n a l A r r a n g e m e n ts . S in g a p o r e : T h is r e p o r t is b e in g d is tr ib u te d in S in g a p o r e b y B N P P a r ib a s S in g a p o r e B r a n c h , a b r a n c h o f B N P P a r ib a s w h o s e h e a d o f fic e is in P a r is , F r a n c e . B N P P a r ib a s S in g a p o r e is a lic e n s e d b a n k r e g u la t e d b y th e M o n e t a r y A u th o r ity o f S in g a p o r e is e x e m p t e d fr o m h o ld in g t h e r e q u ir e d lic e n s e s t o c o n d u c t r e g u la t e d a c tiv itie s a n d p r o v id e fin a n c ia l a d v is o r y s e r v ic e s u n d e r t h e S e c u r itie s a n d F u t u r e s A c t a n d t h e F in a n c ia l A d v is o r s A c t. © B N P P a r ib a s ( 2 0 0 4 ) . A ll r ig h ts r e s e r v e d .
Philippe D’Arvisenet, Global Chief Economist
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June 2009
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