With economic recovery taking root in major economies the Organisation for Economic Cooperation and Development is warning that central bankers need to increasingly focus on tackling inflation.
In its latest forecast the OECD has lifted its growth projections for the G7 for the first half of the year but left out Japan.
Pier Carlo Padoan, the OECD’s chief economist, said: “Growth looks to be stronger in respect to what we are anticipating in the November economic outlook. It’s around three percent from the G7 as a group from which we have to exclude Japan.” He added: “Of course the downside of this scenario is that there might be risks on the inflation front.”
The OECD believes growth in the G7 economies – minus disaster-hit Japan – will average 2.9 percent on an annualised basis in the second quarter of this year, with Canada the strongest performer and Britain the weakest.
The OECD saw growth in the three biggest euro zone economies – Germany, France and Italy – accelerating rapidly and doing much better than towards the end of last year.
But it warned that as well as keeping inflation under control, governments should also pay attention to the unemployment situation.