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

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6 Risks in Middle East and India