Signs that global growth was picking up early this year have faded during the spring. Survey data for April confirm that there has been a slowdown in the US, where the fiscal squeeze is taking a toll, and that the Chinese authorities’ stimulus efforts have been less effective than most had expected. What’s more, there is little evidence that economic activity is recovering in Japan, and output appears to be contracting in the major core and peripheral euro-zone countries. The fading recovery contributed to a fall in most commodity prices over the past three months. Partly as a result, inflation has dropped significantly in the major advanced economies.
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