Indeed as the impact of the Euro area sovereign debt crisis worsened, the forecast for global output for 2012 was reduced from 3.8 percent to 3.3 percent. Furthermore, despite recent encouraging indicators, the pace of economic recovery in the US continues to be constrained by failure to agree on the necessary fiscal policy measures.
In contrast, economic activity in emerging market economies is expected to remain buoyant, particularly in China and India, although these countries’ economies are also vulnerable to any major global economic slowdown.