(Reuters) – Walk softly. Global growth looks to be smoothly downshifting as China slows, the U.S. economy firms, and troubled Europe, at least for now, avoids a messy crash.
Ratings downgrades on nine euro zone countries by Standard Poor’s late Friday – including France, Italy and Spain – sent a shiver through financial markets. But the move was long telegraphed, likely limiting any spillover.
A global economy slowing only gently would be an immense relief after a fraught end to 2011, but it is far from guaranteed.
Greek debt talks could collapse next week in a tussle over the size of losses banks should face. Tensions over Iran’s nuclear program continue to threaten oil markets. And U.S. data last week showed surprisingly weak retail sales and a rise in jobless claims, a reminder that the U.S. recovery is not yet out of the woods.
So, even as signs suggest only a slight easing in global growth this year to a pace around 3 percent, the pitfalls are numerous. Prime among
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