The present state of the world economy  1.1  Uncertainty abounds  The world economy has not been in exactly very good shape these past few months. The ongoing war in Iraq is weighing on the world economy. Financial markets are fickle; confidence among businesses and consumers remains subdued.
Interestingly, throughout the crisis we experienced little sign of financial market discomfort with that position. We are now experiencing a big improvement in the current account, reducing the deficit to 3 percent, but we believe it will deteriorate again as the recovery picks up. 6  BIS Review 82/2010  3.