Despite strong headwinds, we do not believe the global economy will slip back into recession in 2012. However, growth will be uneven and choppy, with few countries recording stronger growth in 2012 than in 2011; of the advanced countries only the US and Japan are likely to achieve this. The euro zone will contract as financial system confidence falters again and unemployment rises, while emerging market growth (crucially including China) continues to slow, increasing uncertainty for the global recovery.

For this stage of the cycle downside risks remain elevated, and we urge continued vigilance in monitoring risks at the global, regional, and country-specific levels.

Cuba:

Economic reforms unleash a rapidly growing private sector.

Kuwait:

Tensions between the executive and parliament destabilise the risk outlook

Poland:

The financial system is relatively well positioned to withstand the euro-zone debt crisis.