Global economic growth is speeding up and has spread to weak spots such as Japan and Europe without sparking a surge in inflation so far, the OECD said today.
But chief economist Jean-Philippe Cotis voiced concern over high oil and commodity prices that the OECD said were likely to stay high because of strong Asian demand despite a sell-off in markets in recent days.
Growth in the 30 mostly industrialised economies of the OECD is forecast to expand 3.1 per cent overall this year, up from 2.8 per cent in 2005, the OECD said in its Economic Outlook, a twice-yearly report.
"The ongoing expansion is entering its fifth year," it said. "Notwithstanding the headwinds from high and volatile energy prices, it is projected to continue and even broaden this year and next."
That echoed the International Monetary Fund (IMF), which in March forecast worldwide economic growth of 4.9 per cent in 2006, the best in 30 years barring an exceptional year in 2004.
Like the IMF, the Paris-based OECD said that current account imbalances - surpluses in China and Japan and deficits in the United States - posed a continuing and perhaps mounting threat.
"A brutal unfolding of such imbalances would hurt the world economy," chief economist Jean-Philippe Cotis said.
The OECD forecast US growth of 3.6 per cent in 2006 and 3.1 per cent in 2007 after 3.5 per cent in 2005.
For the euro zone, it predicted GDP growth of 2.2 per cent this year and 2.1 per cent in 2007 after 1.4 per cent this year.
For Japan, it forecast 2.8 per cent growth this year and 2.2 per cent in 2007, from 2.7 per cent in 2005.