After a significant downturn, the economy should start recovering in the second half of 2012, mainly due to stronger world trade, which will feed into higher business investment. On the other hand, private consumption will remain depressed given sluggish growth in real incomes, reflecting higher unemployment and only modest real wage increases, as well as planned pension cuts and a depressed housing market. A further drag on growth comes from the planned fiscal consolidation. Overall, growth is set to remain below potential throughout 2012-13, and unemployment will rise further.