The IMF and the World Bank held their annual meetings in Japan last week, and the resulting consensus was that global growth is slowing down and the risk of a global recession is increasing. The IMF cut its global growth targets for 2012 to 3.3%, which is the slowest growth rate in three years, and cut targets for 2013 to 3.6%. The US and Japan are the only two developed countries forecast to grow more than 2% this year, and both are expected to post GDP growth of just 2.2%. Meanwhile, developing economies are slowing down as well. For example, the growth forecast for Brazil was cut in half, to 1.5% for 2012. The IMF indirectly offered an explanation last week for the decoupling of economic performance between the Eurozone and the US, citing overly optimistic fiscal multiplier assumptions in the econometrics models used to predict the impact of austerity. While the struggling nations in Europe are forcing budget cuts in order to receive financial aid, they may be creating a bigger drag on growth than previously thought, making debt reduction more difficult rather than easier, and causing the falling growth to flow through to suppliers like China. SNW continues to see large risks in the global economy; we expect these risks to create volatility in our markets, which we will be able to take advantage of for our clients as opportunities present themselves.