Global economic trends Where do Africa and

Transcript:Global economic trends Where do Africa and:
Global economic trends Where do Africa and Nigerian capital markets stand See Appendix A-1 for Analyst Certification and Important Disclosures Citi Investment Research & Analysis is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. David Cowan Africa Economist +44 207 986 3285 david.cowan@citi.com 21 September 2011 2 2 The global outlook Assessing the downside risks SEC Learning Series – Session 101 June 11th 2012 3 3 The global economic outlook The outlook for global growth continues to remain very mixed. At Citi we are more negative than the IMF base case because of our views on the poor economic outlook for the Euro Zone We currently expect global growth to slow from 3% in 2011 to 2.6% in 2012, before a modest rebound to 3% in 2013 (all a marked slowdown from the 4% achieved in 2010) Although this is still above the recent long term average (2.8% from 1980 to 2010), perhaps crucially the outlook remains highly uneven and the divergences seem to be getting wider Growth should continue to be led by emerging markets, which will account for around 70% of global growth, led by Asia Within Europe, there should be unusually wide growth gaps between the growth leaders (Germany, Sweden, Switzerland) and laggards (Greece, Portugal and Spain) In particular, the global growth outlook, notably because of our economic outlook EU, continues to be capped by two major headwinds First, private sector deleveraging. Household debt levels remain elevated and we are now in prolonged period of balance sheet repair The process is more advanced in the US than the EU Second, the EMU crisis remains unresolved and we expect further episodes of heightened risk aversion, notably this summer around the Greek elections We think it is best to view this as a combined crisis involving balance of payments, banks and fiscal issues SEC Learning Series – Session 101 June 11th 2012 4 4 The global economic outlook The Euro Zone debt crisis has continued to worsen in 2012, with the Greek, Irish, Portuguese and increasingly, the Spanish governments all caught in austerity traps Currently,