Alliance Trust PLCGlobal Economic Outlook

Dr. Shona DobbieChief Economist

1 May 2014

US – fiscal position

Source: Macrobond

US federal government budget US federal debt vs GDP

Outlays

Receipts

Nominal GDP

Debt outstanding

$ tr

illio

n

$ tr

illio

n

US – profits vs employee compensation

Source: Macrobond

Employeecompensation (LHS)

Corporateprofits (RHS)

US – quantitative easing

Source: Macrobond

Federal reserve assets

$ tr

illio

n

Emerging markets – currency moves vs US$

Source: Macrobond

Turkey

RussiaBrazil

Inde

x

Rebased end June 2013 = 100

Emerging markets – currency moves vs US$

Source: Macrobond

Turkey

Russia

Inde

x

Rebased end June 2013 = 100

Brazil

Ukraine

China – shadow banking

Source: Macrobond

Trust and Entrusted Loans

Equity Financing

Loans in Foreign Currencies

Loans in Local Currency

Corporate Bonds Net Financing

Bank’s Acceptance Bills

Yua

n tr

illio

n

China – economic structure and growth

Source: Macrobond

Breakdown of GDP World bank urban population rates

Jap

an

Un

ited

Sta

tes

Un

ited

Kin

gd

om

Ger

man

y

Ch

ina

Fixed Investment

Household consumption

47.5

42.5

37.5

32.5

1994 1998 2002 2006 2010

Per

cent

Per

cent

Japan – ‘Abenomics’

Source: Macrobond

Monetary base Yen and stock market

Yen/Dollar(RHS)

TOPIX (LHS)

Inde

x Yen

Yen

, tril

lion

Europe – unit labour costs

Source: Macrobond

Jan 2000 = 100 End 2008 = 100

Ireland

Spain

Italy

Germany

Spain

Ireland

Italy

Germany

Europe – inflation rates

4.0

3.0

2.0

1.0

0.0

Per

cen

t

Jan 2012 Jan 2013 Jan 2014

Spain

Germany

France

Italy

Source: Macrobond

UK – labour market recovery

Source: Macrobond

UK unemployment rate UK employment

Self employed(RHS)

Total (LHS)

UK – house price growth

Source: Macrobond

UK – Halifax house price index Nationwide house prices

YoY growth

MoM growth

London

Scotland

US – food prices

Source: Macrobond

Food price inflation Monthly food price moves

Oranges

Eggs

Beef steaks Butter

Citrus fruits

Pork chops

Eggs

Butter

Important information

• Alliance Trust PLC is a self-managed investment company with investment trust status. It is one of the largest generalist UK investment trusts by market value on the London Stock Exchange.

• Alliance Trust Investments Limited and Alliance Trust Savings Limited are subsidiaries of Alliance Trust PLC.

• The Economic Research Centre is part of Alliance Trust and was formed to carry out economic and social analysis to deepen our understanding of economies, markets and socio-economic issues. The views, statements, opinions, information and data contained in this publication are those of the Alliance Trust Economic Research Centre, these views may change as subsequent conditions vary.

• Information used in this publication has been compiled from sources believed to be reliable but it has not been independently verified: no representation has been made to its accuracy or completeness, no reliance should be placed on it and no liability is accepted for any loss arising from reliance on it.

• This publication should not be used or considered as an offer or solicitation to buy or sell any financial instrument and is for information purposes only. This publication is not a financial promotion or recommendation to make any particular investment. Alliance Trust PLC, Alliance Trust investments Limited and Alliance Trust Savings Limited are not authorised to give financial advice.