The Asia and the Pacific region continues to be the global growth leader even as it faces significant development challenges and downside risks.

Six months ago, economists outlined several scenarios that could slow the global recovery. With financial turmoil spreading from Europe to both advanced and developing countries, these forecasts appear to be coming true.

With economic activity surpassing pre-crisis levels in developing countries but still lagging in many high-income economies, differences in macroeconomic policy stances are creating tensions that could threaten growth in increasingly important emerging markets.

While the worst of the financial crisis may be over, the global recovery is fragile and the fallout from the crisis will change the landscape for finance and growth over the next ten years.