Washington, D.C., November 7, 2014 - The global economy showed increasing signs of pick up recently, the Institute of International Finance said in its latest Global Economic Monitor , helped by lower oil prices.

The upswing remains underpowered, uneven and fragile and financial markets are likely to remain jittery, the IIF said. Economic policy is key to putting the recovery on a more solid footing. The IIF projects global growth to rise to 3.1% in 2015 from 2.6% this year.

"We do now see welcome signs that global growth is finally picking up, but momentum is still slow ", said Charles Collyns, IIF chief economist, "We are concerned that the recovery could again falter, without more growth friendly policies. Most importantly, the Euro Area needs to follow through on its efforts to support demand, and the Fed should continue to move cautiously as it heads towards raising interest rates. Moreover, supply side reforms are essential in a number of mature and emerging economies, including in all of the BRICs."

The IIF identified the top six risks for the global economy:

• U.S.: A sharp bond market correction could be triggered by shifts in the anticipated path of the Fed's exit in response to rising signs of labor market tightness. Recent signs of a pick-up in wages need to be watched carefully.
• Emerging Markets: Intensification of country specific problems in a period of rising global risk aversion would intensify contagion across emerging markets. Divergence in G3 monetary paths could add to volatility and risk aversion.
• Euro Area: Slow recovery could allow low inflation to become entrenched, raising real interest rates and complicating debt dynamics. Failure by the ECB to deliver on expectations for aggressive action, including full-scale QE, would exacerbate such concerns.
• China: The housing downturn coupled with efforts to slow excessive credit and wasteful investment could drive a substantial growth slowdown and delay reforms.
• Ukraine: Continuing risk of Russian involvement spreading across Ukraine, leading to major civil unrest and interruptions of regional natural gas supply.
• Japan: The government needs to support the BoJ by pushing ahead its structural reform agenda more ambitiously, while pushing fiscal consolidation on a gradual but sustained path.

The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. Within its membership IIF counts commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.