Since we published our last Outlook, the world economy has once more confirmed its ability to withstand shocks and maintain momentum. Asia has forged ahead, with China enjoying double-digit expansion and India growing very rapidly as well. After years of deflationary weakness, Japan has embarked on a new path, with personal consumption and labour income joining exports and business investment as the main drivers of growth. In the United States, hurricanes had a damaging but only transient impact on activity, which was already bouncing back early in 2006. In Continental Europe, activity weakened again late last year, partly reacting to rising oil prices, but accelerated in early 2006.