Aglobal economic slowdown is under way: problems in US housing continue, the US and European financial systems remain under stress and growth in the rest of the world is beginning to be dragged down. Of course, from the International Monetary Fund's perspective, medium-term considerations are of critical importance. Nonetheless, this does not preclude potentially effective counter-cyclical policies.

Our latest forecasts, released yesterday, are for a marked US slowdown and a more moderate but still significant slowdown in other industrial countries. The precise timing of a slowdown in emerging markets is not completely clear, but we think it may come sooner rather than later given their strong linkages with industrialised countries.