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Big picture still dominated by fiscal challenges

Despite the turmoil in financial markets, the near-term outlook for the world economy is brighter than a few months ago. Nonetheless, a seemingly impressive rebound in 2010 is likely to give way to renewed weakness from 2011 as the reversal of fiscal stimulus again exposes the underlying fragilities left by the recession. For those thinking beyond the next few quarters, this is still the big issue.

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