However, the pace of the growth in the near term remains modest, with ‘abnormally’ low inflation and interest rates pointing to risks of financial instability, it added.
The economic think-tank is projecting that the eurozone will grow by 1.4% this year and accelerate to 2% in 2016, benefiting from low oil process, monetary stimulus and euro depreciation. Echoing these expectations, European Central Bank president Mario Draghi said this week that it was time to be optimistic about the economic outlook in the eurozone.
Japan is projected to grow by 1% in 2015 and 1.4% next year, but longer challenges in the country remain, the OECD said. Last month it was reported that Japan had recovered from recession in the last quarter of 2014, growing by 0.6% after two quarters of decline.
The OECD projected that the US would grow by 3.1% this year and by 3% in 2016, while the UK is expected to grow at 2.6% in 2015 and 2.5% the following year. Canadian growth is projected at 2.2% and 2.1% in 2016.
Looking at emerging economies, the OECD said China is expected to grow by about 7% annually in both 2015 and 2016. India will grow by 7.7% in 2015 and 8% in 2016. But Brazil’s economy is expected to shrink by 0.5% in 2015 before returning to a 1.2% growth rate in 2016, the OECD said.
OECD chief economist Catherine Mann said: ‘Lower oil prices and widespread monetary easing have brought the world economy to a turning point, with the potential for the acceleration of growth that has been needed in many countries.
‘There is no room for complacency, however, as excessive reliance on monetary policy alone is building-up financial risks, while not yet reviving business investment. A more balanced policy approach is needed, making full use of fiscal and structural reforms, as well as monetary policy, to ensure sustainable growth and public finances over the longer term.’
