In the major advanced economies, especially the United States and Europe, deleveraging by households and financial institutions and fiscal consolidation continue to weigh on growth. In the United States, the protracted dislocation of the housing market has been a drag on the recovery, despite some recent improvement.
The debt crisis in the euro area, which intensified late last year, triggered a recession there and has had negative spillovers to many other countries, including the United States. In emerging market economies such as China, growth is moderating from the rapid pace of recent years, as exports to Europe have fallen off and domestic demand has also cooled.