World growth is expected to remain below trend at 3.1 per cent in 2012 and 3.4 per cent in 2013.

The Euro Area is forecast to contract by 0.5 per cent this year and grow only marginally next year with unemployment reaching ‘depression-era’ rates in some periphery economies. The US is likely to grow by 2 per cent in each year.

Growth in Brazil, Russia, India and China will be below long-term potential next year, although ‘hard-landings’ will be avoided; the impact on advanced economies will be offset by a large gain in competitiveness.

Debt to GDP ratios in OECD countries will, on average, be higher in 2014 than at present.