The global economy is witnessing a broad-based recovery. The latest World Economic Outlook of the International Monetary Fund has highlighted that, for the first time in a decade, about 75% of the global economy—measured by gross domestic product at purchasing power parity—is accelerating. But there are risks.

For example, inflation in the developed world continues to remain low and could limit the possibility of intervention if growth falters. Tightening of financial conditions due to policy normalization in the US could lead to volatility in financial markets and affect growth prospects.

The challenge for policymakers now will be to capitalize on recovery and sustain the momentum. Focus will also shift to how large economies use this opportunity to increase potential output.

However, a broad recovery does not mean that the need for global cooperation has reduced by any means. For instance, even though the risk of protectionism has reduced somewhat, the evolving nature of trade warrants greater global cooperation.