Global economic activity has started to gain momentum in recent months. Continuing unconventional monetary policy and further steps towards the resolution of the European sovereign debt crisis have led to an improvement of financial market conditions. While the balance of risks now seems less skewed to the downside than it has been three months ago, global economic environment remains fragile, as the global outlook continues to be largely dependent on developments in the euro area and the US fiscal situation. Emerging economies will continue to grow much faster than advanced economies, as their relatively healthier public finances leave them room to accommodate a sudden shock to their economies. On the contrary, fiscal consolidation will be a major drag to economic growth in the euro area and the US in 2013.