The global recovery has hit several unforeseen bumps – particularly the crisis in Ukraine and the unusually long, cold winter in the US – but the world’s growth is expected to be back on track for the second half of 2014 and the coming years.

That is the conclusion of the The World Bank’s flagship report on the state of the global economy, known as the Global Economic Prospects. Released twice yearly, it also includes three year forecasts covering the projected macroeconomic performance of each of the world’s regions.

It shouldn’t be surprising for global observers that overall GDP projections for 2014 have fallen on a raft of negative developments. The Bank has reduced the year’s growth outlook to 2.8 percent, versus its more optimistic January expectation of 3.2 percent. Yet this is largely blamed on what the report labels “idiosyncratic” factors, especially in the US, where “abnormally cold weather curtailed investment and exports, while firms cut back on inventories” during the first quarter.

Yet the Bank also argues that, after years of substandard and halting expansion, it is the world’s developed economies that will lead the way towards faster growth.

The global recovery has hit several unforeseen bumps – particularly the crisis in Ukraine and the unusually long, cold winter in the US – but the world’s growth is expected to be back on track for the second half of 2014 and the coming years.

That is the conclusion of the The World Bank’s flagship report on the state of the global economy, known as the Global Economic Prospects. Released twice yearly, it also includes three year forecasts covering the projected macroeconomic performance of each of the world’s regions.

It shouldn’t be surprising for global observers that overall GDP projections for 2014 have fallen on a raft of negative developments. The Bank has reduced the year’s growth outlook to 2.8 percent, versus its more optimistic January expectation of 3.2 percent. Yet this is largely blamed on what the report labels “idiosyncratic” factors, especially in the US, where “abnormally cold weather curtailed investment and exports, while firms cut back on inventories” during the first quarter.

Yet the Bank also argues that, after years of substandard and halting expansion, it is the world’s developed economies that will lead the way towards faster growth. World GDP growth is expected to accelerate to 3.4 percent in 2015 and then 3.5 percent in 2016. At the same time, however, the previously torrid pace of developing nations’ growth will plateau due to deep seated structural impediments.

Better prospects for the US, Europe, and Japan in particular are driving this outlook. The Bank points to not only improved weather conditions, but more broadly a winding down of fiscal consolidation, an improving labor market and falling unemployment, and a “release of pent up demand.”

In the US, the Federal Reserve would seem to agree. In the Reserve Board’s June Federal Open Market Committee, the Fed maintained its so called “taper” of monetary easing – again reducing its monthly bond buying, which is now down to $35 billion a month.

Despite the fact that the Fed reduced its 2014 US growth outlook to 2.2 percent from 2.9 percent earlier in the year, it remained optimistic about the short and medium term outlook of the recovery. “Economic activity has rebounded in recent months,” argued the Committee. Specifically, the Fed pointed to the fact that “labor market indicators generally showed further improvement,” while “household spending appears to be rising moderately and business fixed investment resumed its advance.”

At the same time, there are challenges for developed countries. The Fed warned that in the US, “the recovery in the housing sector remained slow.” In Europe, despite Germany returning to 3.3 percent growth, the periphery is much weaker, with the World Bank showing investment still down nearly 50 percent from pre-crisis peaks in Spain, Portugal, and Ireland.

In addition, European bank lending continues to contract, and the European Central Bank has had to continue to ease in the face of potential deflation. And then there is the threat of further escalation in Ukraine, which the Bank estimates could shave up to a full percentage point off of growth in developing countries. The slowdown of Russia, which Bloomberg predicts could fall into recession in the coming year, has also impacted European markets.

Japan, too, faces roadblocks. Its aggressive monetary expansion – “Abenomics,” as it has come to be known, after Prime Minister Shinzo Abe – has indeed led to GDP growth, but the Bank’s economists warn that without underlying structural adjustments that boom won’t last.

For the developing world, from Latin America to Africa, there is both good and bad news. Growth is set to be “disappointing” in the rest of 2014, with the third straight year of less than 5 percent expansion. On the positive side, however, economic activity is expected to pick up through 2016, with growth topping 5.5 percent.

On a more fundamental level, many developing countries are dealing with structural problems that will drag on growth over the coming decades. As Andrew Burns, the lead author of the World Bank report, points out, bottlenecks in energy and infrastructure, labor markets, and the business competitiveness in many large middle-income countries are holding back GDP and productivity growth.

Latin America is a good example, with regional leader Brazil seeing slowing economic performance, growing upward price and wage pressure, and high current account deficits. Argentina and Venezuela, too, have seen rising inflation and economic mismanagement, and softening commodity prices and slackening demand from China are impacting countries region wide.

That is why the Bank sees regional growth falling to 1.9 percent in 2014. When it does pick back up again, it will likely be on the back of strong structural reform efforts by Mexico, which is pushing to liberalize its energy sector and attract major international investment.

Major risks for the world economy have receded, but dangers are still there. Tightening of monetary policy, fighting in Syria, Ukraine, and now Iraq, and potential credit bubbles are all still threats. As the World Bank points out, in order to weather these shocks and lay the groundwork for a return to sustainably high growth, the developing world must press ahead with reforms: to improve infrastructure, increase competition and competitiveness, and balance state budgets.