AFD - 2019 Universal registration document

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PRESENTATION OF AFD

Activities of the Agence Française de Développement Group in 2019

1.5.3.7 Property companies Inconnectionwith itsoperations inFrenchOverseasDepartments and Collectivities, AFD was a shareholder, alongside the State and local authorities, of six property companies, the SIDOMs. At the end of 2015, the Government announced its intention to reorganise the shareholding of the SIDOMs by transferring its equity interests to a public operator specialising in social housing, the Société Nationale Immobilière, a wholly-owned subsidiary of the Caisse des Dépôts et Consignations. The State asked AFD to sell its own shares at the same time as the transfer. Following the negotiations conducted between the State and SNI, an agreement was signed for a disposal in two stages: first the purchase by SNI of 34% of the companies’ share capital, including all AFD’s shares in 2017, then an option to purchase

the balance of the State’s shares within five years. The full sale took place on 19 Ǿ December Ǿ 2019. AFD no longer holds any equity investments on its own behalf in SIDOM (with the exception of SIC in New Caledonia), as these were sold for €20.9M. The shares still recognised in its balance sheet are held on behalf of the State and were sold at the end of 2019. As a result, as of the end of 2019, AFD’s equity stake in its own name in the share capital of SIC was down to 50%, so the company was not included in the transaction as the State had no equity interest in this company. SIC is a social landlord whose mission is to further social cohesion and the fight against inequality and exclusion by offering housing solutions for people with the most modest means. It manages a stock of 10,700 accommodations, housing 40,000 Ǿ people, i.e. 15% of the population of New Caledonia.

1.6 Activities of the Agence Française de Développement Group in 2019

1.6.1 International context 2019

combined with strong uncertainties surrounding trade policies, the contribution of the external environment to European growth has decreased. The contribution of domestic demand remained positive, notably thanks to public investment, and private consumption remained supported by the dynamic labour market. The unemployment rate is at its lowest level since 2008, at 7,4% in December 2019 . At the national level, performance was mixed , with business showing resilience in Spain and France. By contrast, Italy and Germany flirted with recession, primarily due to persistent difficulties in manufacturing, which is structurally more exposed to trade tensions than the services sector. The downward revision to growth and inflation forecasts in the Euro zone seems to consolidate the shift in the ECB’s monetary policy, which announced several easing measures in September 2019. Growth in the emerging and developing countries was 3.7% for 2019 , sharply down from 2018 (4.4%). Uncertainties about the change in global demand weighed on oil prices in 2019. Brent prices oscillated between $50 and $60 a barrel, with an average price 11% lower than in 2018, bearing the brunt among other things of Chinese-American tensions. Metals prices rose 4.3% in 2019. Lastly, agricultural commodities fell in 2019. In 2019 emerging and developing Asian countries remained the driver for global growth with a growth of 5.6% despite the slowing trend in growth in China. Growth in China was 6.1% in 2019 , as compared to 6.6% in 2018. In Q4 2019, China recorded a growth rate of 6,0% year- on-year, with the escalation in customs duties with the United States and the slowdown in international trade exacerbating the

The pace of global growth in 2019 was 2.9%, its lowest since the international financial crisis of 2008. This low global growth is due to the increase in trade barriers and geopolitical uncertainties as well as to macroeconomic difficulties in several emerging countries. It is accompanied by a significant decrease in the growth in world trade (from 3.6% in 2018 to 1.1% in 2019), notably for manufactured goods. The slowdown was widespread and concerned all major advanced economies and emerging and developing countries, despite the monetary policy easing in most of these countries. The growth in the American economy slowed to around 2,3% in 2019 , under the impact of slowing investment, exports and industrial production, and as the effects of the budgetary stimulus carried out by the Trump administration for private consumption diminish. The labour market remains sound , with an unemployment rate at its lowest level (3.6%) and wages that recorded growth exceeding 3% year-on-year, supporting private consumption. The inflation measure (the PCE) tracked by the U.S. central bank came in below the targeted 2%. Despite continued robust macroeconomic fundamentals, the US Federal Reserve (FED) has adopted a preventive reaction to the cyclical slowdown , in a context of increased uncertainty due to the geopolitical and trade tensions and repeated pressure by President Trump for a monetary easing policy. The eurozone saw its growth slow to 1.2% in 2019 . In a context of a slowdown in global growth and international trade,

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UNIVERSAL REGISTRATION DOCUMENT 2019

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