The Japanese government is so desperate to boost consumption it's advertising ways to spend tax-cut proceeds. Asian financial markets are still tense, with Indonesia especially under pressure and rioting in the streets there. The region's economic downturn has only just started, the LBS team believes. Also, high growth is slowing in China, which escaped the brunt of the region's currency crisis. Business investment there is faltering.
Consumer spending is weak.
One danger associated with the troubles in Japan and other parts of Asia is that renewed trade tensions seem inevitable, the LBS team warns, as companies there push exports into North America and Europe to keep up production. This will be especially true if the yen falls sharply in the second half of the year, as the centre predicts. Sustaining world economic growth and improving job prospects are high on the summit agenda. The overall environment is still reasonably good. But clearly threats to continued expansion have increased.