1 Philippe d’Arvisenet Global Chief Economist ECONOMIC RESEARCH DEPARTMENT THE WORLD ECONOMIC OUTLOOK AMSTERDAM, March 2007

1

Philippe d’ArvisenetGlobal Chief Economist

ECONOMIC RESEARCH DEPARTMENT

THE WORLD ECONOMIC OUTLOOK THE WORLD ECONOMIC OUTLOOK

AMSTERDAM, March 2007AMSTERDAM, March 2007

2Philippe d’ArvisenetGlobal Chief EconomistEconomic Research Department

Chart 1

0

200

400

600

800

1000

1200

2000 2006

source: IMF (WEO, September 2006)

Foreign exchange reserves, billion $

Japan

China

India

Asia excl. China

& IndiaRussia Eastern

Europe

Middle-East

Westernhemisp.


Chart 2

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

-8

-7

-6

-5

-4

-3

-2

-1

0

US current-account balance,annual rate, % of GDP

sources: BEA, IMF

World reserves, billion $

World reserves & US current-account balance


I - UNITED STATES


BELOW POTENTIAL GROWTH IN 2007

The housing market correction is not over yet Slowdown mitigated by temporary phenomenon: oil prices down,

unexpected warm weather... Consumption is expected to weaken

GDP growth close to 2% in 2007 But the economy will rebound later : once inventory correction (housing and

industry) is over


LOWER INFLATIONARY PRESSURES

Upward pressures from energy prices have receded Gradual decline in core inflation Slower growth in activity alleviate tensions Increases in shelter costs to moderate Fed Fed’s view to change Ease expected for the end of Q2

EXTERNAL IMBALANCES The current account deficit is expected to remain close to 6.5% GDP Slower domestic demand and a weaker dollar should limit the slippage


Chart 3

-20

-15

-10

-5

0

5

10

15

20

90 92 94 96 98 00 02 04 06

GDP

Non residential private investment

Residential private investment

USA: real GDP & investment growth

(y/y %)

source: BEA


Chart 4

-20

-15

-10

-5

0

5

10

15

20

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

-2,0

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

USA: exports & imports growth, & external contribution

source: BEA

External contribution to real GDP growth

(q/q annualized growth, %)

Exports of G&S, volume, y/y %

Imports of G&S, volume, y/y %


Chart 5

-6

-4

-2

0

2

4

6

8

10

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

35

40

45

50

55

60

65USA : industrial production & ISM

sources: Federal Reserve, ISM

Industrial production, y/y %

ISM


Chart 6

40

45

50

55

60

65

70

97 98 99 00 01 02 03 04 05 06 07

Manufacturing

Non manufacturing

United States: ISM indices

source: ISM


Chart 7

-30

-20

-10

0

10

20

30

40

50

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

United States: existing home sales & existing homes for sale

source: Bureau of Census

(y/y %)

Existing home sales

Available existing homes for sale


Chart 8

-50

-40

-30

-20

-10

0

10

20

30

40

85 87 89 91 93 95 97 99 01 03 05 07

20

30

40

50

60

70

80

Housing permits

USA : housing starts, permits, investment & NAHB

source: BEA, Bureau of Census, NAHB

Housing starts

Residential investment

y/y %

NAHB index


Chart 9

70000

80000

90000

100000

110000

120000

130000

140000

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

3000

4000

5000

6000

7000

8000

Total

USA : employment, thousands

source: BLS

Construction


Chart 10

-15

-10

-5

0

5

10

15

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

-60

-40

-20

0

20

40

60

Residential private investment, volume

USA : employment & residential investment, y/y %

sources: BEA, BLS

Employment : construction


Chart 11

0

200

400

600

800

1000

1200

1400

80 82 84 86 88 90 92 94 96 98 00 02 04 06

USA: flows of household debt and investment

Mortgage debt,billion $

Residentialinvestment,

billion $

source: Federal Reserve (Flow of Funds)


Chart 12

-1

0

1

2

3

4

5

6

7

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Consumption

USA: household income and consumption

(volume, y/y % change)

Disposable income

source: BEA


Chart 13

-60

-50

-40

-30

-20

-10

0

10

20

30

40

50

60

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

3

4

5

6

7

8

9

10

11USA: Conference Board surveys & unemployment

sources: Conference Board, BLS

Jobs hard to get - Jobs plentiful(consumer surveys on the present employment)

Unemployment rate, %


Chart 14

0

2

4

6

8

10

12

14

16

18

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

USA: the employment insecurity indicator & the unemployment rate

source: BLS

Job leavers as % of total unemployed



Chart 15

-4

-2

0

2

4

6

8

10

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

United States: employment & real GDP growth, y/y %

sources: BEA, BLS

Real GDP

Total employment


Chart 16

-2

0

2

4

6

8

10

12

14

60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

400

450

500

550

600

650

Net financial wealth as % of disposable income

Personal savings as % ofdisposable income

United States: household savings and net financial wealth

sources: BEA, BLS, Federal Reserve



Chart 17

-1000

-800

-600

-400

-200

0

200

80 82 84 86 88 90 92 94 96 98 00 02 04 06

-12

-9

-6

-3

0

3USA: household acquisitions of corporate equities

in billion $,annual rate

as % of disposable income

source: Federal Reserve (FoF)


Chart 18

-25

-20

-15

-10

-5

0

5

10

15

20

25

80 82 84 86 88 90 92 94 96 98 00 02 04 06

Total

Structures

Equipment & software

USA: breakdown of the nonresidential private fixed investment

(volume, y/y %)

source: BEA


Chart 19

-25

-20

-15

-10

-5

0

5

10

15

20

25

80 82 84 86 88 90 92 94 96 98 00 02 04 06

-3,00

-2,00

-1,00

0,00

1,00

2,00

3,00

4,00

USA: corporate investment & financing gap

sources: BEA, Federal Reserve

Financing gap as % of GDP

Non residential investment, structures, volume, y/y %

Non residential investment, equipment & software, volume, y/y %


Chart 20

-25

-20

-15

-10

-5

0

5

10

15

20

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Nonresidentialprivate investment :

equipment & software

New orders of nondefensecapital goods excl. Aircraft(3-month-moving average)

USA: investment and orders

sources: BEA, Bureau of Census

(y/y % change)


Chart 21

-800

-600

-400

-200

0

200

400

600

95 96 97 98 99 00 01 02 03 04 05 06 07

-60

-40

-20

0

20

40

60

80

100USA: dividends, new equity issues & profits of corporate business*

source: Federal Reserve (FoF)

Profits before tax,y/y % Net new equity issues,

billion $, annual rate

(* nonfarm nonfinancial corporate business)

Net dividends,billion $, annual rate


Chart 22

-6

-3

0

3

6

9

12

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

-20

-10

0

10

20

30

40GDP

deflator

Unit labor cost

USA: unit labour cost, GDP deflator & corporate profits, y/y %

sources: BEA, BLS

Corporate profits


Chart 23

-4

-2

0

2

4

6

8

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Core inflation

USA: inflation & hourly earnings, y/y %

source: BLS

Total inflation

Hourly earnings


Chart 24

-2

0

2

4

6

85 87 89 91 93 95 97 99 01 03 05 07

72

74

76

78

80

82

84

86USA: unit labour cost, core inflation & capacity utilisation rate

Unit labour cost, y/y % (total business sector)

sources:BLS, Federal Reserve

Core inflation, y/y %

Capacity utilisation rate, %


Chart 25

0

1

2

3

4

5

6

7

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Core CPIShelterCore CPI less shelterTotal CPI

sources: BEA, BNPParibas

United States: inflation, y/y %


Chart 26

0

5

10

15

20

80 82 84 86 88 90 92 94 96 98 00 02 04 06

USA: GDP growth & Fed Funds rate

sources: BEA, Federal Reserve

Current GDP, y/y %

Fed Funds rate


Chart 27

-10

-5

0

5

10

80 82 84 86 88 90 92 94 96 98 00 02 04 06

3

5

7

9

11

Output gap, %

USA: Fed Funds, output gap & unemployment rate

sources: Federal Reserve, BLS

Real Fed Funds rate, %



II - EUROZONE


ECONOMIC ACTIVITY

Growth above potential in 2006 Solid domestic demand. Weak external sector (with the exception of Germany)

Deceleration in 2007 Impact of VAT hike in H1 2007 (however, lower-than-expected) External demand: the impact of US slowdown Impact of the Euro appreciation Lagging impact of monetary tightening


Inflation : what ECB looks at Pressure on core inflation

Wage negotiations (Germany and Italy) Higher capacity use rebuilds pricing power

Headline inflation impacted by favourable base effects until summer

Monetary stance M3 growth reached a record high since the launch of the Euro Lending to household is slowing, lending to corporate is accelerating Interest rates are entering in neutral territory Refi rate at 4% in mid-2007. A pause is to follow


STRUCTURAL ISSUES

Challenges : low potential growth the cost of aging

A lot remains to be done : fiscal consolidation goods market reform (privatization, competition, barriers to entry etc…) labour market reform (disincentives to work, disincentives to create jobs

have to be addressed…)

The political impediments


Chart 28

-8

-6

-4

-2

0

2

4

6

8

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Euro zone : real growth, y/y %

sources: OECD, Eurostat

GDP

Private consumption

Investment


Chart 29

45

50

55

60

65

98 99 00 01 02 03 04 05 06 07

-0,5

0

0,5

1

1,5

Composite PMI

Real GDP, q/q , %

sources: Reuters, Eurostat

Euro zone : PMI and real GDP growth


Chart 30

-4

-2

0

2

4

6

8

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

GermanyFranceItalySpain

Real GDP growth, y/y %

source: Eurostat


Chart 31

-10

-5

0

5

10

15

20

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Germany France

Italy Spain


source: Eurostat


Chart 32

80

90

100

110

120

130

140

150

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Unit labour cost, manufacturing, indice Q1/92=100

source: OECD

Germany

France

Italy

Spain


Chart 33

-6

-4

-2

0

2

4

6

8

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Germany

France

Italy

Spain

Household consumption, volume, y/y %

source: Eurostat


Chart 34

0

2

4

6

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

0

5

10

15

20

25

30

35

40Euro zone : wages and inflation

Negotiated wages,y/y %

Expected inflation over next 12 months*

sources: Eurostat, * European commission surveys

Observed inflation, y/y %


Chart 35

-2

0

2

4

96 97 98 99 00 01 02 03 04 05 06 07

78

80

82

84

86

Core inflation, y/y %

sources: European Commission, Eurostat

Industrialcapacity utilisation

rate, %Unit labourcost, y/y %

Euro zone: utilisation rate, labour costs and inflation


Chart 36

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

1999 2000 2001 2002 2003 2004 2005 2006 2007

Total inflation

Core inflation

Euro zone: ECB repo rate and inflation

ECB short-term repo rate

sources: Eurostat, ECB


Chart 37

-1

0

1

2

3

4

5

1999 2000 2001 2002 2003 2004 2005 2006 2007

Euro zone: interest rates

Real 10-year rate

Real 3-month rate

ECB short-term repo rate

sources: ECB, Eurostat


Chart 38

-1,5

-1

-0,5

0

0,5

1

1,5

2

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

0,8

0,9

1

1,1

1,2

1,3

1,4

1,5

USA/Euro zone: interest rate & exchange rate

EUR/USD exchange rate

(monthly averages)

USA-Germany : 10-year interest spread, %

sources: Bundesbank, Federal Reserve, Reuters


III - JAPAN


ECONOMIC GROWTH HEADING TOWARDS A SOFT PATCH

GDP growth, 2.2% in 2006, likely to decelerate below potential in H1 07, before accelerating again, up 2% at most in 2007

Final domestic demand is supportive

Inventories correction will substact to growth early in 2007

Slowdown in exports but also in investment


BoJ hiked last month

Credibility issue, risks seen with asset prices

BoJ will remain cautious (long pause expected)

The yen should gradually strengthen versus the dollar (unwinding of carry trade...)

Japan core inflation at zero and below zero with international standards


Chart 39

-4

-3

-2

-1

0

1

2

3

4

5

95 96 97 98 99 00 01 02 03 04 05 06 07source: Cabinet Office

Japan : real GDP and domestic demand growth, y/y %

Real Domestic demand

Real GDP


Chart 40

65

70

75

80

85

90

95

100

105

110

115

120

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 07

Industrial production

Inventory ratio

Japan : industrial production and inventories

(indices, 1995=100)

source: MoF


Chart 41

-50

-40

-30

-20

-10

0

10

20

30

40

50

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Japan: profits and business climate

Current profits, all industries, y/y % change

Tankan surveys: business condition, forecasts, all enterprises, %

sources: MoF, Tankan (Bank of Japan)


Chart 42

-4

-2

0

2

94 95 96 97 98 99 00 01 02 03 04 05 06 07

0,4

0,5

0,6

0,7

0,8

0,9

1

1,1Japan : employment growth and job offers to applicants ratio

source: Ministry of Labour

Full-time employees, y/y %

Job offers to applicants ratio


Chart 43

-4

-2

0

2

4

6

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07sources: Ministry of Labour, Ministry of Public Management

Japan : wages & inflation, y/y %

Inflation

Average earnings (6-month moving average)


Chart 44

0605

04 03020100

999897

9695

9493

9291

90 89

8887

86

85 8483

8281

80

79

78

7776

75

74

73

7271

-3

0

3

6

9

12

15

18

21

1 2 3 4 5 6Unemployment rate, %

Cor

e in

flat

ion,

%

source: Statistics Bureau of MIC

Japan: inflation & unemployment


Chart 45

-20

-10

0

10

20

30

40

50

95 96 97 98 99 00 01 02 03 04 05 06 07

Japan : exports growth, %

Goods exports* to the USA

Goods exports* to China

(* 3-month moving average of the y/y %)

sources: MoF, Cabinet Office



Chart 46

-20

-15

-10

-5

0

5

10

15

20

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

Japan: nonresidential investment & excess capacityTankan surveys: excess capacity,

actual, all enterprises, %

sources: Cabinet Office, Tankan (Bank of Japan)

Nonresidential investment, volume, y/y %


Chart 47

-2

-1

0

1

00 01 02 03 04 05 06 07

Japan : core inflation & target rate

Total inflation,y/y %

sources: Ministry of Public Management, BoJ

Core inflation (excl. Fresh food),y/y %

Call overnight, target rate, %


Chart 48

0

50

100

150

200

250

300

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06

0

5000

10000

15000

20000

25000

30000

35000

40000Japan : land prices and Nikkei

sources: Japan Real Estate Institute,Tokyo Stock Exchange

Nikkei

Land prices index: 6 big cities


Chart 49

0

1

2

3

4

5

6

7

94 95 96 97 98 99 00 01 02 03 04 05 06 07

80

90

100

110

120

130

140

150USA/Japan: interest spread & exchange rate

sources: BBA, Reuters

LIBOR 3-monthinterest spread: USA - Japan, %

USD/JPY exchange rate


Chart 50

0

1

2

3

4

5

99 00 01 02 03 04 05 06 07

90

100

110

120

130

140

150

160Euro zone/Japan: interest spread & exchange rate

sources: BBA, Reuters

LIBOR 3-monthinterest spread: Euro zone - Japan, %

EUR/JPY exchange rate


Economic Research Department economic-research.bnpparibas.com Philippe d'ARVISENET 33 1.43.16.95.58 [email protected] Chief Economist OECD COUNTRIES Philippe d'ARVISENET Eric VERGNAUD 33 1.42.98.49.80 [email protected] Head of OECD Countries research Structural issues, forecasts Caroline NEWHOUSE-COHEN 33 1.43.16.95.50 [email protected] Country economics UNITED STATES, CANADA Jean-Marc LUCAS 33.1.43.16.95.53 [email protected] JAPAN, AUSTRALIA, NEW ZEALAND Caroline NEWHOUSE-COHEN 33 1.43.16.95.50 [email protected] EURO ZONE, ITALY, EU ENLARGEMENT Clemente De LUCIA 33.1.42.98.27.62 [email protected] FRANCE, EURO ZONE LABOUR MARKET Mathieu KAISER 33.1.55.77.71.89 [email protected] GERMANY, AUSTRIA, SWITZERLAND, PUBLIC FINANCES Frédérique CERISIER 33 1.43.16.95.52 [email protected] SPAIN, PORTUGAL, GREECE, SINGLE EUROPEAN FINANCIAL MARKET Eric VERGNAUD 33 1.42.98.49.80 [email protected] UNITED KINGDOM, NORDIC COUNTRIES, BENELUX, PENSIONS, LONG TERM FORECASTS Raymond VAN DER PUTTEN 33 1.42.98.53.99 [email protected]


BANKING ECONOMICS Van NGUYEN THE Head 33 1.43.16.95.54 [email protected] Laurent QUIGNON 33 1.42.98.56.54 [email protected] Céline CHOULET 33 1.57.43.02.91 [email protected] COUNTRY RISK Guy LONGUEVILLE Head 33 1.43.16.95.40 [email protected] François FAURE 33 1 42 98 79 82 [email protected] Capital flows to emerging markets Bulgaria, Roumania, Turkey ASIA Delphine CAVALIER 33 1 43 16 95 41 [email protected] Alexandre VINCENT 33 1 43 16 95 44 [email protected] LATIN AMERICA Sylvain BELLEFONTAINE 33 1.42.98.26.77 [email protected] Bérénice PICCIOTTO 33 1.42.98.74.26 [email protected] AFRICA Stéphane ALBY 33 1.42.98.02.04 [email protected] Gaëlle LETILLY 33 1.42.98.56.27 [email protected] EASTERN EUROPE Jean-Loïc GUIEZE 33 1 42 98 43 86 [email protected] RUSSIA, FORMER SOVIET REPUBLICS Tatiana ESANU 33 1.42.98.48.45 [email protected] MIDDLE EAST – SCORING Pascal DEVAUX 33 1.43.16.95.51 [email protected]


Our publications economic-research.bnpparibas.com

CONJONCTURE focuses each month both on the main economic issues and structural problems. ECONOMIC MARKET MONITOR provides a detailed follow-up of the economic situation whilst analysing interest and exchange rate developments in OECD countries (8 issues per year). PUBLIC FINANCES IN THE EURO ZONE is issued quarterly. ECOFLASH comments and analyses the main economic events (data releases, economic policy decisions) in the hours following their release. ECOWEEK focuses on specific and current economic issues (every Monday).

To receive our publications, please contact :Francine BATHREAU 33-1-43-16-95-48

[email protected]

BNP Paribas is incorporated in France with Limited Liability. Registered Office 16 boulevard des Italiens, 75009 Paris.BNP Paribas is regulated by the FSA for the conduct of its designated investment business in the UK and is a member of the London Stock Exchange.BNP Paribas London Branch is registered in England and Wales under No. FC13447. Registered Office: 10 Harewood Avenue, London NW1 6AATel: +44 (0)20 7595 2000 Fax: +44 (0)20 7595 2555 www.bnpparibas.com

The information and opinions contained in this report have been obtained from public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not berelied upon as such. This report does not constitute a prospectus or other offering document or an offer or solicitation to buy any securities or other investment. Information and opinions contained in the report are published for the assistance ofrecipients, but are not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient, they are subject to change without notice and not intended to provide the sole basis of any evaluation of the instrumentsdiscussed herein. Any reference to past performance should not be taken as an indication of future performance. No BNP Paribas Group Company accepts any liability whatsoever for any direct or consequential loss arising from any use ofmaterial contained in this report. All estimates and opinions included in this report constitute our judgements as of the date of this report. BNP Paribas and their affiliates (“collectively “BNP Paribas”) may make a market in, or may, as principal oragent, buy or sell securities of the issuers mentioned in this report or derivatives thereon. BNP Paribas may have a financial interest in the issuers mentioned in this report, including a long or short position in their securities, and or options, futuresor other derivative instruments based thereon. BNP Paribas, including its officers and employees may serve or have served as an officer, director or in an advisory capacity for any issuer mentioned in this report. BNP Paribas may, from time totime, solicit, perform or have performed investment banking, underwriting or other services (including acting as adviser, manager, underwriter or lender) within the last 12 months for any issuer referred to in this report. BNP Paribas, may to theextent permitted by law, have acted upon or used the information contained herein, or the research or analysis on which it was based, before its publication. BNP Paribas may receive or intend to seek compensation for investment bankingservices in the next three months from an issuer mentioned in this report. Any issuer mentioned in this report may have been provided with sections of this report prior to its publication in order to verify its factual accuracy.

This report was produced by a BNP Paribas Group Company. This report is for the use of intended recipients and may not be reproduced (in whole or in part) or delivered or transmitted to any other person without the prior written consent of BNPParibas. By accepting this document you agree to be bound by the foregoing limitations.

Analyst Certification

Each analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the analyst’s personal views about any and all of the issuers and securities named in this report, and (ii) no part of theanalyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed herein.

United States: This report is being distributed to US persons by BNP Paribas Securities Corp., or by a subsidiary or affiliate of BNP Paribas that is not registered as a US broker-dealer, to US major institutional investors only. BNP ParibasSecurities Corp., a subsidiary of BNP Paribas, is a broker-dealer registered with the Securities and Exchange Commission and is a member of the National Association of Securities Dealers, Inc. BNP Paribas Securities Corp. accepts responsibilityfor the content of a report prepared by another non-US affiliate only when distributed to US persons by BNP Paribas Securities Corp.

United Kingdom: This report has been approved for publication in the United Kingdom by BNP Paribas London Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas London Branch is regulated by the FinancialServices Authority (“FSA”) for the conduct of its designated investment business in the United Kingdom and is a member of the London Stock Exchange. This report is prepared for professional investors and is not intended for Private Customersin the United Kingdom as defined in FSA rules and should not be passed on to any such persons.

Japan: This report is being distributed to Japanese based firms by BNP Paribas Securities (Japan) Limited, Tokyo Branch, or by a subsidiary or affiliate of BNP Paribas not registered as a securities firm in Japan, to certain financial institutionspermitted by regulation. BNP Paribas Securities (Japan) Limited, Tokyo Branch, a subsidiary of BNP Paribas, is a securities firm registered according to the Securities & Exchange Law of Japan and a member of the Japan Securities DealersAssociation. BNP Paribas Securities (Japan) Limited, Tokyo Branch accepts responsibility for the content of a report prepared by another non-Japan affiliate only when distributed to Japanese based firms by BNP Paribas Securities (Japan)Limited, Tokyo Branch.

Hong Kong: This report is being distributed in Hong Kong by BNP Paribas Hong Kong Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Hong Kong Branch is regulated as a Licensed Bank by the Hong Kong Monetary Authority andis deemed as a Registered Institution by the Securities and Futures Commission for the conduct of Advising on Securities [Regulated Activity Type 4] under the Securities and Futures Ordinance Transitional Arrangements.

Singapore: This report is being distributed in Singapore by BNP Paribas Singapore Branch, a branch of BNP Paribas whose head office is in Paris, France. BNP Paribas Singapore is a licensed bank regulated by the Monetary Authority of Singapore is exempted fromholding the required licenses to conduct regulated activities and provide financial advisory services under the Securities and Futures Act and the Financial Advisors Act.

© BNP Paribas (2004). All rights reserved.

Documents

1 Philippe d’Arvisenet Global Chief Economist ECONOMIC RESEARCH DEPARTMENT THE WORLD ECONOMIC OUTLOOK AMSTERDAM, March 2007