In the main scenario the recovery in the United States and the euro area is expected to begin during the second half of this year and next year growth will largely be back at the trend level. Growth in Sweden is expected to be approximately the same this year as last year, but in reality this is a weakening if one takes into account the larger number of working days this year. Inflation in Sweden rose rapidly in the autumn and, measured by both the CPI and the CPIX, is expected to exceed the inflation target during a large part of the forecast period. The uncertainty over future economic developments is still considerable, however, and to highlight this a number of alternative scenarios are described in the Monetary Policy Report. One of these involves greater financial turmoil and that growth abroad will slow down more sharply. In this scenario growth in the US economy will fall more than in the main scenario, at the same time as the borrowing costs for households and companies in the whole world will  BIS Review 30/2008  1  be higher. This leads to a general dampening of demand and to lower GDP growth and inflation both abroad and in Sweden. But, as we have written in previous reports, there is also a risk that inflation will be higher than in the main scenario if wage developments are stronger and productivity weaker than expected.
The Islamic Financial Services Board (IFSB) estimated that assets of the global Islamic financial services industry grew by 20.4% year-on-year to reach an estimated USD1.6 trillion as at end 2012.1 Last year also saw a record volume of sukuk issuances globally, with sukuk issuance from more countries, and of larger size and longer tenor. Key financial centres have continued to facilitate the development of Islamic finance within their jurisdictions. Singapore has made adjustments to our regulatory and tax regime to allow for the growth of Islamic finance since 2004. Hong Kong has recently amended its tax regulations to allow for issuance of sukuk, while the UK recently established an industry task force to facilitate further development of Islamic finance. Going forward, the broadening and deepening of economic and financial ties between Asia and the Middle East, the two major centres for Islamic finance, will also provide further impetus for future growth of Islamic finance globally. Connectivity between Asia and the Middle East There are three important observations to be made on the growing connectivity between Asia and the Middle East. First, the economic relationship between the two regions has expanded beyond the energyrelated sector. Asia’s demand for energy exports from the Middle East will continue to remain robust as the region expands. However, non-energy trade between the two regions is also growing fast. About 40% of GCC’s non-oil exports are to Asia. Saudi Arabia is the leading  1  Islamic Financial Services Industry Stability Report 2013, Islamic Financial Services Board (IFSB).