Global output has been rising at an annualised rate of 4¼–5½ per cent per quarter since the rebound in the second quarter of 2009. We estimate that global GDP increased at an annualised rate of 4.8 per cent in the first quarter of 2010, and forecast world growth of 5 per cent in 2010 as a whole. Asia continues to drive the global recovery, with exceptionally strong growth in China, India, Taiwan and Korea in the first quarter of the year. Japan and Hong Kong also recorded strong growth, partially closing the output gaps in these economies. In the Americas, Canada and especially Brazil expanded rapidly, with more moderate growth in the US. Europe, on the other hand, continues to lag behind Asia and the Americas, with output in the EU as a whole rising at an annualised rate of just 1 per cent in the first quarter of 2010. Within Europe, output rose more rapidly than anticipated in Ireland, Portugal, Sweden, and to a lesser extent in Italy. But only in Sweden did this reflect a recovery in domestic demand, as the recovery in most of Europe has so far relied on external demand.