The global economy is transitioning into what is likely to be a smoother and less volatile period.

Financial market conditions have improved significantly since June 2012, and high-income countries still face serious challenges, the likelihood of a major crisis has declined. Overall, high-income growth is expected to only gradually strengthen from 1.2 percent this year to 2.3 percent by 2015.

The bulk of developing countries are fully recovered from the crisis. Several even risk overheating if policy does not tighten. In developing Europe the recovery remains incomplete with unemployment, and spare capacity central problems. For the Middle-East and North Africa, civil and political unrest continues to hold back growth.

New risks and challenges include quantitative easing in Japan, and its withdrawal in the United States. Lower commodity prices are a potential concern for commodity exporters, while asset price bubbles and excess leveraging could be a problem among fast growing East Asian economies.