Our baseline forecast is for global growth of 3.7 per cent in 2012. Growth will accelerate to 4 per cent in 2013. These forecasts are little changed from our previous forecast.

As in our previous forecast, we assume a delayed but ultimately successful resolution of the Euro Area crisis. Nevertheless, we expect a mild recession in the Euro Area as a whole, as well as in the UK. Downside risks to the Euro Area remain high. Fiscal austerity will weigh on growth in the short term, while medium to long term structural problems remain unresolved.

We forecast growth of about 2 per cent in the US this year, while China and India, although slowing, will continue to drive world growth.