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Risks in Middle East and India
December, 2014
Citi Commercial Bank
US Exports FY13
1 Risks in Middle East and India
Saudi Arabia#19
Qatar#45
Kuwait#54
Oman#70
$21.9 B
•Precious Stones ($5.8B)
•Aircraft ($3.0B)
•Machinery ($2.3B)
Medical Instruments ($1.3B)
$19.0 B
•Vehicles ($5.8B)
Machinery ($5.0B)
Aircraft ($2.1B)
Medical Instruments ($923MM)
$5.0 B
•Aircraft ($2.8B)
•Machinery ($594MM)
•Vehicles ($513MM)
•Precious Stones ($307MM)
$2.6 B
•Vehicles ($1.1B)
Machinery ($476MM)
Medical Instruments ($1.3B)
Chemicals ($87MM)
$1.5 B
•Machinery ($500MM)
•Vehicles ($448MM)
Medical Instruments ($78MM)
Other ($77MM)
$1.0B
Vehicles ($267MM)
Machinery ($266MM)
Other ($188MM)
Aircraft ($44MM)
GCC
UAE#17
$24.6 B
•Machinery ($6.4B)
•Aircraft ($5.8B)
•Vehicles ($3.4B)
•Precious Stones ($5.8B)
India#18
Bahrain#78
Overview/Trends – Middle East and India
2
Falling commodity prices will continue to shape EM in 2015
Noticeable performance gaps in Capital-Output since 2011
The fall in commodity pricing has a created a notable affect in commodity exporting across Emerging Markets
2014 trends are projected to continue in 2015
A lower level of investment efficiency among commodity exporters is particularly unpleasant when combined with weaker economic dynamism
Trend expected to continue throughout 2015
Risks in Middle East and India
Future Outlook India
Emerging markets should face a challenging, though not insurmountable 2015
India’s GDP Growth projection Most significant change has
been in political environment with pro business Modi government winning largest mandate in 30 years
Reform momentum gathering pace in fuel, labor, and taxation
Disinflation trends continue: Look toward cumulative 100bps cut by FY16
The ongoing trends in fiscal consolidation has led to S&P revising India’s sovereign rating outlook to ‘Stable’ from ‘Negative’
3 Risks in Middle East and India
GCC Outlook
Commodity price headwinds persist into 2015
United Arab Emirates
Saudi Arabia
Vulnerable to recent oil price reductions
Expect some economic headwinds in 2015 for Saudi Arabia, as lower oil prices put downward pressure on government revenues.
Kuwait Having underachieved on the economic front for the past decade, there are some tentative signs that Kuwait might be starting to turn things around.
Qatar Recent bribery allegations for 2018 and 2022 World Cup Bid could have residual affect in 2015
4 Risks in Middle East and India
Country Specific Political Risks
UAE
Saudi Arabia
Large fiscal and external surpluses
Strong financial asset base
Kuwait Large surpluses provide financial cushion
Qatar Strong economy, regional strains
India Waking up the elephant
5 Risks in Middle East and India
Citi’s Global NetworkThe World’s Largest Network Comprehensive Capabilities Unparalleled Client Service
North America– Canada
– Mexico
– US
Indian Sub-continent– Bangladesh
– India
– Pakistan
– Sri Lanka
Central and Eastern Europe– Bosnia
– Bulgaria
– Czech Rep.
– Hungary
– Kazakhstan
– Poland
Western Europe– Belgium
– Channel Isl.
– Denmark
– Finland
– France
– Germany
– Greece
– Iceland
– Ireland
– Italy
– Luxembourg
– Netherlands
– Norway
– Portugal
– Spain
– Sweden
– Switzerland
– UK
Latin America– Argentina
– Aruba
– Bahamas
– Barbados
– Bermuda
– Bolivia
– Brazil
– Cayman Isl.
– Chile
– Colombia
– Costa Rica
– DominicanRepublic
– Ecuador
– El Salvador
– Guatemala
– Haiti
– Honduras
– Jamaica
– Panama
– Paraguay
– Peru
– Puerto Rico
– Trinidad & Tobago
– Uruguay
– Venezuela
Middle East and Africa– Algeria
– Bahrain
– Cameroon
– Congo
– Egypt
– Gabon
– Ghana
– Israel
– Ivory Coast
– Jordan
– Kenya
– Kuwait
– Lebanon
– Mauritius
– Morocco
– Nigeria
– Qatar
– Senegal
– South Africa
– Tanzania
– Tunisia
– Uganda
– United Arab Emirates
– Zambia
Asia Pacific– Australia
– Brunei
– China
– Guam
– Hong Kong
– Indonesia
– Japan
– Korea
– Macau
– Malaysia
– New Zealand
– Philippines
– Singapore
– Taiwan
– Thailand
– Vietnam
Trade capabilities in more than 80 countries
More than $104B in confirmed LCs outstanding and more than $59B in advised LCs outstanding
Provider of Trade Services to 97% of the top 500 companies in Forbes’ Global 2,000 List
Full product capabilities across every major Trade product type:
– Import and Export Letters of Credit
– Standby LC and Bank Guarantees
– Open Account
– Supplier and Receivables Financing
Five regional processing centers offering around-the-clock operational support
3,500 dedicated Trade experts with regional and local expertise
Knowledgeable Trade Services Professionals
– Romania
– Russia
– Slovakia
– Turkey
– Ukraine
6 Risks in Middle East and India