The International Monetary Fund and the World Bank stressed the need for continued cooperation among world economies, saying the global financial system remains vulnerable to further shocks. The warning comes as the world lending institutions prepare for its annual Spring Meeting in Washington.
The world economy has weathered the worst of the economic downturn, but the IMF says the global financial system is not out of the woods just yet.
On Thursday, IMF managing director Dominique Strauss-Kahn warned member countries to guard against complacency. "Certainly the recovery is getting stronger, but everybody can understand that it's not the recovery we want," Strauss-Kahn said.
The IMF says uneven growth poses the biggest risks, with advanced countries growing too slowly and developing economies growing too fast.
"The main challenges for emerging market economies have certainly to do with the risk of over-heating, and in low income countries, the question of food and fuel prices is coming back with the risk of having something as important and strong and difficult as we had in 2008," Strauss-Kahn said.
Despite projections of four-and-a-half percent growth in the global economy, the IMF says it's been a jobless recovery. Strauss-Kahn cites Tunisia and Egypt - where economic indicators showed growth but failed to create opportunities for its citizens.
World Bank president Robert Zoellick says the disconnect helped fuel popular revolts, resulting in greater instability.
"One of the lessons in the Middle East, North Africa, of some of these events, is that while some of the growth rates were reasonably good, macro-economic stability wasn't enough," he said.
The World Bank issued a new report Thursday showing the impact of the unrest on food prices. Zoellick says a 36 percent increase in food prices since last year helped push 44 million into poverty. He warns another 10 percent increase in food prices will drive 10 million more into extreme poverty.
"The numbers tell a grim story of persistent grinding pressure on the world's poor. We are all aware of the ingredients: high food costs, mix in price gyrations and then stir higher fuel costs, and you get a real toxic brew of real pain contributing to social unrest," Zoellick said.
The comments come as finance ministers from around the world gather in Washington for the annual Spring Meetings of the World Bank and the International Monetary Fund.
The meetings will focus on the global economic recovery and the steps needed to bolster financial conditions around the world.