Although the world economy is unlikely to enter recession in 2012, the outlook remains very uncertain, especially given the sharp deterioration in Europe’s risk outlook that is likely to take the currency area as a whole into recession in Q1 or Q2 2012 amid further troubles for the region’s financial sector and a recent slew of sovereign risk ratings downgrades.

Even in regions where the outlook appears more promising, there are still causes for concern: although growth in China will help to drive the global economy, the unraveling of China’s property bubble could yet provide another shock to the world economy in 2012. And as Europe’s sovereign debt crisis becomes ever more complex, with worries that it could spread to the global banking sector, close monitoring for a number of countries is warranted.

France:

D&B downgrades France's country risk rating as the economy struggles to grow and political uncertainty rises.

South Korea:

Economic and political uncertainty increases ahead of an economic downturn.

Uruguay:

Economic growth is strong, despite deteriorating regional and global economic conditions.