1. Economic Outlook Turning points Global Chief Economist Helge J. Pedersen Baltic M&A and Private Equity Forum Riga 24 October 2013

2. Global economic trends • Nordic and Baltic economies

3. Global Our baseline scenario – turning points Helge J. Pedersen Growth picture changes - the old world wakes up while the new one has problems Less expansionary monetary policy, but interest rates will be low for much longer The euro remains strong - can it last?

4. Euro area Game changer - OMT workswithoutbeingused TtThe Helge J. Pedersen

5. Global Growth around the corner – but at lower levels than before the crisis Helge J. Pedersen

6. Global The 2014 economic heat map … Helge J. Pedersen

7. Global Low inflation and high rate of unemploymentpave the way for continuedlowinterest rates • The ECB has announced a new forward guidance strategy: • The Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time. This expectation is based on the overall subdued outlook for inflation extending into the medium term, given the broad-based weakness in the real economy and subdued monetary dynamics. Helge J. Pedersen

8. Global Reason to worry about MP-plus: new bubbles and inflation Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. ... Milton Friedmann, The Counter-Revolution in Monetary Theory (1970) Helge J. Pedersen

9. Global economic trends • Nordic & Baltic economies

10. Nordics&Baltics Differentgrowth pattern … Helge J. Pedersen

11. Nordics&Baltics …not leastwhen it comes to manufacturingproduction Helge J. Pedersen

12. Nordics&Baltics Sentimentindicatorslook promising for the short-term outlook: PMIs Helge J. Pedersen

13. Nordics&Baltics Sentimentindicatorslook promisingfor the short-term outlook: consumerconfidence Helge J. Pedersen

14. Global Ourgrowthforecasts in numbers Helge J. Pedersen

15. Nordics&Baltics Long-term growth potential depends on the productivity development Source: OECD Helge J. Pedersen

16. Nordics&Baltics Reason to worry for the longer term: underinvestments Helge J. Pedersen

17. Nordic&Baltics Despite the factthat the Nordics and Baltics areamong the top 30 countries to do easy business in Helge J. Pedersen

18. Nordics&Baltics New investment activity is a must for the Nordics to maintain their relatively good competitiveness and for the Baltics to improve theirs further Helge J. Pedersen

19. Global Conclusion Helge J. Pedersen The combination of low interest rates and a solid global economic recovery is good news for the general M&A activity in 2014 New investment activity is a must for a bright future for the region

20. Nordics&Baltics Only a few weaknesses in the Nordic and Baltic countries according to the early warning mechanism … Helge J. Pedersen

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