Global economic recovery is on track – with the US and euro area economies growing faster than expected – but still facing many threats.
That is the latest assessment from the Organisation for Economic Co-operation and Development.
OECD Secretary General Angel Gurria said those threats include high oil prices and the European sovereign debt crises: “There is a generalised recovery, but this recovery is not as strong as we would like it and not as generalised and that there are downside risks with high unemployment, with high deficits, and many consequences of the crisis for the most vulnerable. The legacy of the crisis is still there, and it is very tough for the most vulnerable.”
In its twice-yearly Economic Outlook, the OECD sees world growth easing from last year’s 4.9 percent to 4.2 percent this year before accelerating to 4.6 percent in 2012.
It raised its outlook for growth in the euro zone and the United States from its previous estimates last November.
For the euro zone it is looking at two percent growth in 2011 and 2012. The US forecast is for 2.6 percent growth this year and 3.1 percent in 2012.
It said Japan’s economy is set to contract by 0.9 percent this year after the March earthquake, tsunami and nuclear crisis.
On interest rates, the OECD said the US should raise them this year while European countries can afford to pause for a while.