Until recently, the spring meetings of the International Monetary Fund and World Bank, held over the weekend in Washington, D.C., looked set to coincide with blossoming optimism about the world economy. But the euro crisis is again casting an unseasonal chill.

Things look brighter than they did even a few months ago. America's fragile recovery continues. After a disastrous 2011, Japan is on track for 2 percent growth in 2012, thanks in part to a boost from reconstruction spending. And the European Central Bank's interventions in the banking system in December and February have pulled the euro area back from the brink.

The IMF's newest World Economic Outlook nudges up expected global growth in 2012 to 3.5 percent, from 3.3 percent in January. In September last year, the IMF reckoned there was a 10 percent chance of global growth dipping below 2 percent in 2012. Now the chance is just 1 percent, it says.

Inflationary pressures that buffeted emerging economies have been dampened by the global slowdown from 2011, allowing more room for monetary easing. The Reserve Bank of India surprised markets a week ago by cutting its benchmark interest rate by 50 basis points, despite an IMF inflation forecast of 8.2 percent in 2012. And a well-managed slowdown appears to be in progress in China. The fund has raised its forecast of Chinese output growth to 8.2 percent.

How China does is of critical importance to emerging markets. A recent paper by the Inter-American Development Bank, for instance, estimated that the impact of Chinese output variations on Latin American economies has tripled since the mid-1990s, while the effect of American economic wobbles has halved.

America nonetheless remains crucial: It is still Latin America's largest trading partner, and the fund reckons that a strengthening U.S. recovery will help growth in Mexico, Central America and the Caribbean to outstrip that in Brazil this year.

But the sky is anything but clear. Although the IMF thinks the prospects for a broad and destabilizing commodity-price spike are falling because a decade of rising food and metals prices has bolstered production, oil remains a dangerous exception. Although oil prices eased last week after talks about Iran's nuclear ambitions, a supply shock that caused oil prices to spike to 50 percent above the baseline forecast (of about $115 a barrel) could reduce global economic output over the next two years by 1.25 percent.

Europe overcast

Inevitably, Europe is the biggest cloud on the horizon. The hopes generated when the European Central Bank (ECB) provided over $1.3 trillion in three-year liquidity to banks have faded. The yield on 10-year Spanish debt is flirting with unsustainable levels once again.

Much depends, of course, on how bad things get. That, in turn, depends on how well Europe uses the time bought by the ECB. The IMF sketches out three possibilities:

•Assuming current policies, eurozone credit is expected to fall by 1.7 percent by the end of 2013, producing a shallow recession this year and a return to growth in 2013.

•Given better-than-anticipated progress on strengthening the eurozone's rescue fund and governance, credit would shrink by just 0.6 percent in 2012 and the euro area could grow this year.

•Alternatively, if recent fiscal agreements unravel, credit could tumble by 4 percent or more, touching off a deeper eurozone recession. Recent Spanish difficulties, including slower growth and disappointing progress on fiscal goals, suggest that this ugly scenario has become more likely.

The fund reckons that growth in America, Japan and emerging Asia could be reduced by more than one percentage point in 2012 and 2013 if the ugly scenario does indeed come to pass. If the eurozone implodes, the fallout will settle most heavily on its own back yard. Central and Eastern Europe are most exposed to eurozone bank de-leveraging, and the huge importance of the euro area in the region's trade would deal it a further blow.

The conventional wisdom, nonetheless, is that the world economy could cope with stagnation or a shallow recession in Europe. But there is another, stormier possibility: that of renewed market turmoil caused by the risk of sovereign default or a eurozone break-up. The global economy is in bud, but it is far too soon to plan for summer.