Fiscal adjustment is proceeding generally as expected in advanced economies, with headline and underlying fiscal deficits that are broadly in line with projections in the April 2012 Fiscal Monitor. Overall, advanced economy deficits are forecast to decline by about ¾ percentage point of GDP this year and about 1 percent of GDP next year in both headline and cyclically adjusted terms, a rate that strikes a compromise between restoring fiscal sustainability and supporting growth. However, continued focus on nominal deficit targets runs the risk of compelling excessive fiscal tightening if growth weakens.