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United States continues its recovery led by private demand and over the second half of last year the economy expanded at an annualised rate of just over 3 per cent.

The euro area has resumed growth, albeit in a somewhat hesitant fashion and with noticeable differences in performance by country.

A few emerging economies have lately come under pressure,

In fact were the Bank of Japan (BoJ) to step up its current program of quantitative and qualitative easing, it would soon be adding more cash to the global financial system, in absolute terms, than the Federal Reserve.

China's economy grew close to, and in fact a little faster than, the government's target last year. Strong and about equal contributions to growth were made by household consumption and investment. Consumer price inflation continues to be stable.

Recent indicators have shown possible signs of slower growth in the early part of 2014: growth of industrial production slowed; retail sales and passenger vehicle sales moderated; and fixed asse

Australia certainly weathered the financial crisis well, and with a real GDP some 13 per cent larger than it was at the beginning of 2009, compares well with many other advanced countries. It is the case, though, that growth while positive, has been running at a pace a bit below its trend pace for about 18 months now. The rate of unemployment has increased by something like a percentage point over the same period.

strong conditions in the natural resources sector.

n the rest of the economy, households have spent most of the past five years behaving more conservatively, or rather more normally, than they did over a long period up to the mid 2000s when they had been in a very expansive mood. Both consumption and residential construction have been soft for a while.

esources sector's capital spending continues to fall, it

It is unlikely, though, that a pick-up in resources exports, as important as that will be, will be enough to keep overall growth on the right trac

Recent data shows stronger household consumption over the summer. The latest surve

bundant signs of confidence in the housing market

Measures of business confidence have improved over the past six months. Businesses seem, so far, to be taking a cautious approach to investment,

is important to stress that this outlook is, obviously, a balance between the large negative force of declining mining investment and, working the other way, the likely pick up in some other areas of demand helped by very low interest rates, improved confidence and so on, as well as higher resource shipments. The lower exchange rate since last April and the improved economic conditions overseas also help.

On inflation, our view is that it will be a little higher than we thought three months ago