Global Economic Outlook: Stability Amidst Uncertainty

1. Osservatorio Congiunturale 22 Mar 2011 Ing. Samuele Maistri - Head of Market Intelligence - Siemens S.p.A.

2. Agenda Esiti della crisi globale Cambiamento delle previsioni GDP Europa Confronto previsioni PIIGS Mercati Verticali – Outlook Considerazioni sui recenti eventi: Giappone Considerazioni sui recenti eventi: Libia

3. The Global Recovery - On Track Real global GDP, change 2009-2012, yoy Key facts / findings Despite worries about sovereign debt, overheating in emerging markets, and food inflation, the outlook for the global economy remains stable. The final consequences of the devastating earthquake in Japan, are not predictable yet. Inflation pressures continue to mount, as higher food and energy costs are increasingly passed on to consumers. In addition, political uncertainty in the Middle East and North Africa region threatens to push oil prices even higher in the months ahead. The biggest concern is that the political unrest could spill into the Gulf States. Most Asian economies had a good start. Inflation remains the dominant risk. China with increasing concerns about overheating. In the U.S. consumers are becoming more active, manufacturing returning to a more robust pace of expansion, and even the labor market showing some signs of entering recovery mode. Nevertheless, the recovery is still fragile and significant downside risks remain. The recovery in the Eurozone is likely to lose momentum in the first half of this year because of fiscal austerity programs and higher interest rates stemming from market fears about sovereign defaults/restructuring. Growth engine Germany with slightly less steam. Japan: In addition to the loss of life, the economic impact of the earthquake will be noticeable in both the effect on workers and on factories. GDP will probably show no growth for one or two quarters, while subsequent quarters should see more rapid growth due to rebuilding and construction. FC Mar 11 FC Jan 10 Source: IHS Global Insight 03/2011

4. Western EuropeChange of GDP-projections for 2011 and 2012 (over the last 12 months) GDP-forecasts for 2011 GDP-forecasts for 2012 Germany UK Germany France UK France Italy Italy Spain Spain 2010 2011 2010 2011 Date of prognoses Date of prognoses Source: IHS Global Insight

5. Highly indebted Eurozone countries („PIIGS“)Change of GDP-projections for 2011 and 2012 (over the last 12 months) GDP-forecasts for 2011 GDP-forecasts for 2012 Ireland Ireland Italy Italy Spain Spain Portugal Greece Portugal Greece 2010 2011 2010 2011 Date of prognoses Date of prognoses Source: IHS Global Insight

6. Vertical Market Outlook Source: ISTAT – HIS Elaboration: Siemens • Generale incertezza sulla ripresa dei mercati post-crisi • Domanda interna limitata dallo scarso potere d’acquisto • Minacce alla competitività: rialzo tassi di interesse • Incremento della marginalità in molti settori • Aumento delle importazioni

7. Japan – Earthquake effects • Europe • The overall impact on European growth should be limited. Japan is not a huge export market for most European countries, although any impact to global growth would obviously have an effect. In 2009, Asia as a whole accounted for 7.3% of German exports, 6.6% of French, 5.6% of Italian, and 8.1% of United Kingdom. • If the impact on Japanese growth will be limited in the near term and there is some boost to growth further out from reconstruction work, then Western European growth will not be significantly affected. • Germany is the most export-oriented Eurozone economy, so it may be hit more than most. The direct trade impact is not that large, as Japan provides less than 3% of German imports and Japan buys just over 1% of total German exports. Export and import shares of other large European economies to Japan are roughly the same or smaller. The big uncertainty about this disaster (and what sets it apart from other such disasters) is that roughly 10% to 15% of electricity generation capacity (both nuclear and coal) may be offline for a few months. In the near term, this could have major negative ramifications for Japanese industrial sectors; some steel and automotive factories have already been closed. The impact on global supply chains could also be significant. This is especially important in industries such as automotive and steel and may result in a boost in the demand for these products from other sources, including the rest of Asia, the United States, and Europe. Source: IHS Global Insight

8. Libyan Military Action • The main concern for Western Europe is that the economic climate is still pretty fragile, with overall recovery from the deep 2008/09 recession being gradual overall and bumpy so far. Therefore, it is more vulnerable to shocks than would be the case if it was in the middle of a robust upturn. Source: Reuters the reason that investors seem calm about Libya and less anxious about Japan is that the global economy is doing well. The International Monetary Fund projects that global growth will be in the region of 4.4 percent this year, well above average for the past 20 years

9. Thanks for your attention