Global Economics:Getting the balance right

On the growth front, the synchronised global recovery continues. Growth continued to surprise on theupside in the likes of China, Japan and the eurozone in Q2, consensus forecasts for most regions ofthe world are still rising and the latest PMIs paint a picture of renewed acceleration. The majorpuzzles of dismal productivity growth and persistently weak wage growth, despite historically lowunemployment, continue. But with global financial conditions still loose, financial markets arebuoyant, particularly in EM where the lure of higher returns continues to suck large capital inflows intoFX, equities and bonds