Despite the global economic recovery gaining strength, soaring commodity prices particularly of oil, geopolitical uncertainty, overheating asset markets in emerging economies are raising downside risks to the revival.

The global economy is on the road to recovery after the profound crisis over the last three years. Nonetheless, the recovery is facing several major challenges and risks in near term. Continuing doubts over European sovereign debt and ever-rising food and oil prices, trade and liquidity imbalances combined with inflation may threaten the global economic recovery. Rising global commodity prices including food and oil are causing hardship in many parts of the world. While in the world's largest economy, the US, recovery stands in between, with growth gathering impetus and inflation risks modest, but with unemployment still inaptly high. Thus, the world economy is advancing with different speed with emerging economies growing robustly and advanced economies growing moderately.

Accordingly, the multi-speed recovery faces several major challenges and risks. Yet the largest emerging market economies, China and India, are facing inflationary pressures associated with strong growth. The historic changes in the Middle East and North Africa (MENA) region added increased uncertainty to the global recovery. With all these risks, the earthquake and tsunami that hit Japan was just one of the many risks that might compromise the global economic recovery.

The Analyst Magazine, Global Economic Recovery, Emerging Economies, Asset Markets, Monetary Policy, European Central Bank, Geopolitical Developments, Global Warming, Gross Domestic Product, Agricultural Products, Emerging Markets.