The global recovery has lost momentum in the first half of 2021 amid new surges of Covid-19 cases and supply chain disruptions. We still expect world production to rebound strongly after the historic collapse in the previous year but we have lowered our forecast for global GDP growth from 6.7 percent to 5.9 percent. At the same time we are now slightly more upbeat for the coming year with global production expected to grow by 5 percent (June forecast: 4.8 percent). With the economy gradually slowing towards the end of the forecast horizon, we expect still relatively strong annual growth of 3.8 percent in 2023. Consumer price inflation has accelerated markedly over the course of this year, largely due to temporary factors. Our baseline forecast expects price pressures to ease in the coming year and monetary policy to remain accommodative. There are, however, upside risks to inflation as large extra savings amassed by private households in many countries over the past year could fuel a sustained rise in prices. In that case, central banks could tighten policy considerably with negative consequences for the growth outlook.