2.  International economic developments  Global economic activity suffered a setback in the second half of 2002 when business confidence was detrimentally affected by revelations of corporate accounting malpractices, a further decline in stock exchange prices and a threat of war against Iraq.
In the first half of 2003 equity prices began to rise somewhat and the war in Iraq was concluded without severely impacting on oil production. Yet the international economy continued to move at a sluggish pace, with the result that most analysts downgraded their initial forecasts for world growth in 2003.