Global growth has lost momentum in H1 2011. However, the global economy will likely gain strength in H2 2011. Emerging markets are expected to remain the locomotive of the global economy. In the developed world, bold political action is required to bring stretched public finances back in order. Further monetary tightening in emerging markets seems appropriate due to inflationary pressures. The ECB will continue its tightening cycle, unless recent weakness in the euro area persists. The Fed seems stuck between sub-par growth and rising price pressures, which makes it less likely to move forward to an interest rate hike before mid-2012.