Leading indicators suggest that what was initially thought of as a soft patch of the global economy due to soaring energy prices and the events in Japan turns out to be a persistent slowdown, mainly due to the escalation of the euro area debt crisis. Absent a severe deterioration in the sovereign crisis front, the global slowdown should be a controlled mid-cycle descent, mainly supported by solid demand growth in EMs and additional monetary easing. Our estimates suggest a deceleration of global growth from 5.1% in 2010 to about 3.8% in 2011 and 3.8% in 2012.
