Emerging Market Growth to Gradually Slow in 2012, but Downside Risks Remain Strong

•  The recovery in mature economies, except Europe, will be more than offset by slower growth in emerging markets in 2012

•  The slowdown in emerging markets in 2012 will occur mainly as a result of those economies reverting back to trend growth

•  So far the easing of activity can be seen most acutely in industrial production and investment

•  However, some stabilization can already be seen in consumer sentiment, stock markets and Purchasing Manager Indexes

•  Policy focus has begun to shift from inflation control to growth support, but policy makers remain somewhat cautious with fiscal boosts and monetary loosening

•  Hard-landing risks are ever-present, in particular in China, but Europe could be most important factor in larger slowdown