Abstract

After slowing in 2012, global growth is projected to pick up during 2013–14, supported by policy actions in advanced economies that have helped mitigate downside risks. The global economy is expanding at three different speeds, with the emerging economies growing rapidly, activity in the United States gaining momentum, and Europe continuing to lag as it struggles with balance sheet repair. In this context, external financing conditions are expected to remain easy and commodity prices near their current high levels in the coming years. However, these conditions could reverse over the medium term, including if advanced economies do not decisively deal with unsustainable debt dynamics or if growth falters in key emerging economies.

Contributor Notes

Note: Prepared by Luis Cubeddu, Julien Reynaud, and Martin Sommer, with contributions from Gabriel Di Bella, Deniz Igan, and Paulo Medas. Madelyn Estrada, Tim Mahedy, and Anayo Osueke provided excellent research assistance.
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