Growth in Europe also faltered in the second quarter, with confidence being eroded by the escalating concerns about sovereign debt in several European countries. And, of course, Japanese economic activity was severely disrupted by the after-effects of the earthquake. Elsewhere in the world, however, economic activity remained robust.
In fact, through most of Asia and Latin America the concern was that the strength of economic activity was putting upward pressure on inflation, and the authorities in many countries in these regions were tightening monetary policy.