WB lowers projection for 2014 global economic outlook

Despite first quarter weakness in the United States, the recovery in high-income countries is gaining momentum, the bank said, estimating that these economies will grow 1.9 percent in 2014, and will accelerate to 2.4 percent in 2015 and 2.5 percent in 2016.

World Bank pares 2014 outlook

Global economy grows on 'two engines': World Bank chief

The Euro area is on target to grow by 1.1 percent this year, while the United States economy, which contracted in the first quarter due to severe weather, is expected to grow by 2.1 percent this year, down from the previous forecast of 2.8 percent.

"High-income economies will contribute about half of global growth in 2015 and 2016, compared with less than 40 percent in 2013," the report said.

Short-term financial risks have become less pressing, in part because earlier downside risks have been realized without generating large upheavals and because economic adjustments over the past year have reduced vulnerabilities.

In the meantime, speculation over the timing and magnitude of future shifts in high-income macro policy may result in further volatility in countries like Brazil, South Africa and Turkey which are plagued by high inflation and current account deficits.

The bank said fiscal policy needs to tighten in countries where deficits remain large, including Ghana, India, Kenya, Malaysia, and South Africa. In addition, the structural reform agenda in many developing countries, which has stalled in recent years, needs to be reinvigorated in order to sustain rapid income growth.