Global activity is firming broadly as expected. Manufacturing andtrade are picking up, confidence is improving, international financingconditions remain benign, and commodity prices are stabilizing.Growth in emerging market and developing economies (EMDEs) is setto recover, as obstacles to growth in commodity exporters diminish,while activity in commodity importers remains robust. Risks to theglobal outlook remain tilted to the downside. These include increasedtrade protectionism, elevated economic policy uncertainty, thepossibility of financial market disruptions, and, over the longer term,weaker potential growth. A policy priority for EMDEs is to rebuildmonetary and fiscal space that could be drawn on were such risksto materialize. Over the longer term, structural policies that supportinvestment and trade are critical to boost EMDE productivity andpotential growth.In addition to discussing global and regional economic developmentsand prospects, this edition of Global Economic Prospects includestwo Special Focus essays of critical importance for emerging anddeveloping economies: an analysis of fiscal positions in EMDEs and adeeper look at the type of firms most affected by post-crisis tradeweakness.Global Economic Prospects is a World Bank Group Flagship Reportthat examines global economic developments and prospects, witha special focus on emerging market and developing countries,on a semiannual basis (in January and June). The January editionincludes in-depth analyses of topical policy challenges faced by theseeconomies, while the June edition contains shorter analytical pieces.