Tensions Mounting in World Economy. Business Cycle Report of August 2011

Following the strong rebound observed since the autumn of 2010, the pace of global economic activity is now moderating markedly. While Asia continues to provide a strong impetus to growth, the US economy grew only modestly in the second quarter, and the latest data for the euro area also signal a slowdown in the pace of expansion in the coming months. Weakening economic activity and the developments surrounding sovereign debt in the USA and the euro area have considerably increased financial market tensions of late and have caused massive stock market losses. Austria's economy still did well overall in the second quarter: GDP expanded by 1.0 percent compared with the previous quarter.