The Organisation for Economic Cooperation and Development (OECD) said today conditions are in place for the global recovery to gain momentum despite the drag of a struggling Japanese economy.
OECD chief economist Mr Jean-Philippe Cotis said the 30-nation group was cutting its 2004 growth forecast for Japan to 2.6 per cent from the 4 per cent predicted in its semi-annual outlook on November 30th.
In an interim report, the OECD kept its forecast of 4.4 per cent US economic growth in real terms in 2004 and maintained its euro zone growth forecast for 2004 at 1.8 per cent.
It raised its 2004 growth foreast for France for to 2.3 per cent from 2.1 per cent. But it trimmed its 2004 growth forecast for Germany to 1.1 per cent from 1.2 per cent; reduced its growth forecast for Italy to 1.1 per cent from 1.3 per cent; and cut its forecast for growth in Britain to 3.1 per cent from 3.2 per cent.
"The global recovery has been marking time as the adverse effects of higher and more volatile oil prices worked their way through," Mr Cotis said in a written statement issued at a news conference.
"Going forward, however, the conditions are in place for the global recovery to pick up momentum, including as concerns enterprise balance sheets and profits, which have strengthened markedly."
He said the slight deceleration seen in the United States had been "consistent with the gradual return to a more neutral policy stance.
"In the euro area, exchange rate appreciation has been taking a toll, with some lag," he said. "In Japan, activity has contracted over the past three quarters, only partly reflecting slowing exports."