There are now widespread signs that activity in the world economy has slowed sharply. This slowdown has been particularly marked within Europe, where our estimates suggest that the European Union economies may have expanded by only some 0.6 per cent in the second half of last year. Elsewhere, the Japanese economy has still to emerge from recession and growth has possibly declined in the United States to a little below trend levels (Chart 1). The perception of recent growth in the US has also changed significantly as a result of the recent rebasing of their national accounts, with the growth of real GDP in 1995 now projected to be between 2–2 1/4 per cent rather than 3 1/4 per cent as shown in our previous forecast. We discuss this issue in more detail below. Overall growth in the OECD region is now projected at 2 per cent in 1995, after 2.6 per cent in 1994. This slowdown has been reflected elsewhere within the world economy, with total world trade growth estimated to have declined to around 6 3/4 per cent last year, and the prices of many industrial raw materials having begun to weaken. For 1996, we presently expect growth of 2 1/4 per cent in the OECD region and growth of 2 per cent in both Europe and the United States.