The global economy is likely to pick up some momentum in the period ahead on the ground of improved economic sentiment and reduced uncertainty about tail risks stemming from the European debt crisis. However, GDP growth is expected to remain subdued due to the lack of a permanent solution to the European crisis, the ongoing consolidation of the public and private sector in developed economies, and subdued global demand. In the US, real economic activity is expected to remain subdued around 2.0% for the remainder of 2012, with domestic fiscal policy and potential financial market spillovers from the European crisis being the major source of uncertainty to the US outlook. The euro area is expected to contract slightly in Q2 as a result of fiscal consolidation. Risks to our global growth outlook stem mainly from the European debt crisis and the US fiscal crisis.