The International Monetary Fund is expecting a more gradual upturn in global economic growth during 2013 than forecast three months ago.
But it says policy actions in Europe and the United States have lowered the acute risk of a broader crisis.
In its World Economic Outlook Update released in Washington overnight, the IMF says it is now forecasting global growth of 3.3 per cent this year, down 0.1 percentage point from a projection made in October, and after a 3.2 per cent expansion in 2012.
"A further strengthening to 4.1 per cent is projected for 2014, assuming recovery takes a firm hold in the euro area economy," the global agency says.
"If crisis risks do not materialise and financial conditions continue to improve, global growth could even be stronger than forecast."
However, significant downside risks remain, with the euro area continuing to pose the biggest threat if the reform momentum there is not maintained and causes a prolonged stagnation in the zone.
The IMF has downgraded the near term outlook for Europe to a continued 0.2 per cent recession, instead of expanding 0.2 per cent in 2013.
It says most advanced economies face two challenges - steady and sustained fiscal consolidation, and continued financial sector reform to decrease risks in the financial system.
"In the United States, the priority is to avoid excessive fiscal consolidation in the short term, promptly raise the debt ceiling, and agree on a credible medium-term fiscal consolidation plan, focused on entitlement and tax reform," the IMF said.
Advanced economies are expected to grow 1.4 per cent in 2013, rather than 1.6 per cent.
There was no specific mention of Australia in the report, but under the "other advanced economies" umbrella, the 2013 growth forecast has been downgraded 2.7 per cent from three per cent.
It says Australia's number one trading partner, China, must continue structural reforms and rebalance the economy toward private consumption to ensure sustained rapid growth.
At the same time, while Japan - Australia's second largest partner - has slid into recession, the IMF expects stimulus to boost growth in the near term.