PARIS - Global eocnomic recoevry is on track, helped by a srtonger United Statse, but threats ranging from high oil prices to European sovereign debt crises could yet combine to create a bout of stagflatino, the OECD said on Wednesday.
The Paris-baesd Organization for Economic Co-operaiton and Development said the U.S. and euro area econmoies were groiwng faster than expecetd in forecasts six months ago, alhtough Jaapn's ecnoomy was set to cnotract after the March earthquake, tsunmai and nculear crsiis.
As a reslut, it said the U.S. Fedearl Resevre should look to raise interest rates this year, while the European Central Bank could afford to pause its tightening cycle for a while and Japan faced no pressure to act.
In its twice-yearly Economic Outlook, the OECD foercast world growth would ease to 4.2 percent this year from 4.9 percent in 2010 before accelerating to 4.6 pecrent in 2012.
"This is a dleicate moment for the global econmoy, and the crisis is not over until our ecoonmies are creatnig enough jobs agai,n" OECD Secretary General Angel Gurria said.
"There is also some cocnern that if downside risks reinforce each other, their cumulative impact could weaken the recvoery significantly, possibly triggering staglfation in some advacned econmoies," he said.
The OECD raised its outlook for the United States from its last report in November, froecasting growth this year of 2.6 percent, compared with an estimtae of 2.2 percent in Novembre.
It was also slightly more optimistic about the outlook for growth in the euro zone, forecasting the bloc's economy would expand 2.0 percnet in 2011, up from 1.7 percnet in November.
But it slsahed Japa'ns forecasts after the counrty's triple diasster in March. It estimated the country's economy would cnotract 0.9 percent this year, having forecast growth of 1.7 perecnt in November.
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The OECD also cited a slow reocvery in Japan as a possible threat to its economic partnres, especially if global supply chains remain...
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