Fresh Connections: Netherlands

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Kristin Wright
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1 Fresh Connections: Netherlands SHIFTING TRADE WINDS: GEOPOLITICS, GLOBAL TRADE & YOU JULIEN MARCILLY CHIEF ECONOMIST APRIL 29, 215

2 Oil prices: Lower for longer 14 Oil price (Brent, source: OPEC) 12 Oil exports (million of barrels per day, source: OPEC) Aug World PRODUCE MARKETING US ASSOCIATION OPEC 2

3 Global disinflation and loose monetary policies Inflation rate (yoy, %) France Spain UK United-States Italy Germany Russia South Korea China Brazil Sources: National central banks 2 Sources: National central banks

4 Global growth: A tiny winy pickup this year, but several risks to be monitored

5 The US: Fine weather, but some cloud is coming The US: GDP Growth US car sector 5% 4% 3% 2% 3,3% 2,7% 1,8% 2,5% 2,9% 1,6% 2,3% 2,2% 2,4% % 6 % -1% -2% -3% -4% -5% -,3% Forecasts Investment Net Exports -2,8% Inventories Government Spending Private Consumption GDP New payment defaults, YoY, billions $ Automobile non-performing loans rates, RHS Source : FED

6 Germany: The H2 214 slowdown was temporary Germany: Export growth and orders Germany: Wages 3% 2 3,5% 1 3,% 2% 2,5% 1% -1 2,% -2 1,5% % -3 1,% -1% -2% -3% Exports of goods (yoy) Export orders (RHS) ,5%,% -,5% Real Wages (yoy) Nominal Wages (yoy) -1,%

7 Spain s recovery: Fast and balanced 6% 4% 2% Spain: Contributions to Real GDP Growth (Yearly) 3,7% 4,2% 3,8% 1,1%,% Forec ast 1,4% 2,2% Spain: Housing price and building permits (yoy in %) Housing price Residential building permits (RHS) % % -4% -6% -8% Investment Net Exports Inventories Government Spending Private Consumption GDP -3,6% -,6% -2,1% -1,2% QIV 28QIV 29QIV 21QIV 211QIV 212QIV 213QIV 214QIV

8 Global growth is picking up, mainly on the back of the US

9 Country risk according to Coface Country assessment Assesses the average risk of payment defaults by companies in a given country This evaluation combines economic and political prospects of the country, Coface payment experience and business climate assessment This evaluation has 7 grades: A1, A2, A3, A4, B, C, D and can be watch listed Business climate assessment Assesses overall business environment and more precisely whether corporate information is available and reliable and whether the legal system provides fair and efficient creditor protection. This evaluation has 7 grades: A1, A2, A3, A4, B, C, D and can be watch listed.

10 Country assessments: Advanced economies Country Risk Assessment January January January March June October December March Business Climate Germany A2ì A2 A2 A2ì A1 A1 A1 A1 A1 Austria A2ì A2 A2 A2ì A1 A1 A1 A1 A1 Canada A1 A1 A1 A1 A1 A1 A1 A1 A1 United States A2ì A2 A2 A1 A1 A1 A1 A1 A1 Japan A1 A1î A1î A1 A1 A1 A1 A1 A1 Switzerland A1 A1 A1 A1 A1 A1 A1 A1 A1 Australia A1 A1 A2 A2 A2 A2 A2 A2 A1 United Kingdom A3ì A3 A3 A3ì A2 A2 A2 A2 A1 Belgium A2ì A2 A2î A3 A3 A3ì A3ì A2 A1 Netherlands A2ì A2 A2î A3 A3 A3ì A3ì A2 A1 France A2ì A2 A2î A3 A3 A3 A3 A3 A1 Ireland A4 A4 A4 A3 A3 A3 A3 A3 A1 Iceland A4 A4ì A4ì A3 A3 A3 A3 A3 A1 Spain A3î A4 B B Bì A4 A4 A4 A1 Portugal A3î A4î B B B B Bì Bì A2 Italy A3 A4 B B B B B B A2 Greece A4 C C C C C C C A3 1

11 Emerging Markets: Diverging trends within the BRIC China GDP Growth forecasts (source: Coface) 7,7 7,4 7, 12 1 Brazil: Household spending India 5, 6,9 7, 8 6 Russia 1,3, Brazil Emerging -3, -,5, 2, ,6 4,3 4, Private consumption Retail trade Sources: IBGE, OECD Q1 21 Q4 21 Q3 22 Q2 23 Q1 24 Q4 24 Q3 25 Q2 26 Q1 27 Q4 27 Q3 28 Q2 29 Q1 21 Q4 21 Q3 211 Q2 212 Q1 213 Q4 213 Q3 214

(bn. USD) 8 76 72 68 64 6 56 52 48 44 RUB vs USD 4

12 Russia: Structural economic weaknesses are exacerbated by the political crisis Net flows from private sector (bn. USD) RUB vs USD 4 Source: Fxtop

13 Russia: and by lower oil prices. Rubble and oil price (YTD % change, 214) Export breakdown (% of total) 1% % Mineral products 71,3-1% Metals 11,1-2% -3% Chemicals 6,1-4% Oil Brent price (YTD % change) Others 3,3-5% -6% RUB vs USD (YTD % change) Equipment goods & Machinery 5-7% 3/1/214 2/2/214 4/3/214 3/4/214 3/5/214 2/6/214 2/7/214 1/8/214 31/8/214 3/9/214 3/1/214 29/11/214 29/12/214 28/1/215 Agricultural products Source: Rosttat 3,

14 Russia: Household spending has been resilient in 214, but won t be this year Retail sales, Industrial production and Investment (yoy growth, %) 12 Wages and pensions (yoy growth, %) % Disposable income (real) ,9 % 1,6 Retail 1 8 Wages (real) Pensions (real) ,9 4,5 7,4 2,4 5,65,5 4,9 3,4 3,2 3,2 4 3,8 4,1 Industrial production Investment,8,6 3,6 3,6 1,4 1,1,4 1,8 1,9 3,1 1,5 2,1 1, Q1 212 Q2 212 Q3 212 Q ,2 Q ,2 Q ,3 Q3 213 Q4 213 Q1-4, ,4 Q ,4 Q Q Q1 212 Q3 212 Q1 PRODUCE 213 Q3 213 MARKETING Q1 214 ASSOCIATION Q3 214

15 China: Overcapacities are more and more visible 1 China: Production Price (yoy)

16 Country assessments: Emerging Markets Country Risk Assessment Emerging asia Business January January January March June October December March Climate China A3 A3 A3 A3 A3 A3 A3î A3î B India A3 A3 A4 A4 A4 A4 A4 A4 B Indonesia B B A4 A4 A4 A4 A4 A4 B Philippines B B Bì A4 A4 A4 A4 A4 B Thailand A3î A3 A3 A4 A4 A4 A4 A4 A3 Sri Lanka C C C C Cì Cì B B B Vietnam Bî C C C C C Cì Cì C Cambodia D D D D D Dì Dì C D Latin america Brazil A3 A3 A3 A4 A4 A4 A4 A4î A4 Colombia A4 A4 A4 A4 A4 A4 A4 A4 A4 Mexico A4 A4 A4 A4 A4 A4 A4 A4 A4 Argentina Cì Cì C C C C C C C Venezuela Cî Cî C Cî Cî D D D D Middle East - North africa Saudi Arabia A4 A4 A4 A4 A4 A4 A4 A4 B Egypt B C C C C C C C B Iran D D D D D D D D C Algeria A4 A4 A4 A4 A4 A4 A4 A4 B Morocco A4 A4 A4 A4 A4 A4 A4 A4 A4 Tunisia A4 A4î A4 B B B B Bì B 16

17 Country assessments: Emerging Markets (2) Country Risk Assessment Emerging Europe Business January January January March June October December March Climate Poland A3 A3 A3î A3 A3 A3 A3 A3 A2 Slovakia A3 A3î A3 A3 A3 A3 A3 A3 A2 Slovenia A2 A2î A3î A4 A4 A4 A4 A4 A2 Rep. Czech A2 A2î A3î A4 A4 A4 A4ì A4ì A2 Latvia B B B Bì B B B B A3 Hungary A4 B B B B B B B A2 Romania B B B B B B B B A4 Turkey A4 A4 A4 A4î A4î B B B A4 CIS Kazakhstan B B B B B B B B B Russia B B B Bî Bî C C C C Ukraine Dì Dì D D D D D D C Subsaharan Africa South Africa A3î A3î A3î A4 A4 A4 A4 A4 A4 Kenya C C C Cì B B B B C Senegal B B B B B B B B B Ivory Coast D D D C C C C C C Ethiopia C C C C C C C C D Ghana C Cì B Bî Bî C C C B Mozambique Bî Bî C C C C C C C Nigeria Dì D D Dì C C C C D Zaire (DRC) D D D D D D D D D 17

Total credit to the non-financial sector (core debt), % of GDP Table F1.1

Total credit to the non-financial sector (core debt), % of GDP Table F1.1 2012 2013 2014 2015 2016 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Argentina 62.6 66.4 64.6 75.5 75.3 81.7 80.1 75.3 71.6 72.7 Australia 208.0