Following a rapid recovery from the 2008-09 recession, growth has slowed in the second half of 2011 and the economy is facing a soft patch with significant downside risks to activity. On the domestic front, a return to lower growth rates from the strong prior upswing was to be expected from a cyclical perspective as potential growth remains weak. This downswing is exacerbated by the substantial deterioration of world trade growth and a loss of confidence due to the euro area debt crisis.