The Organization for Economic Cooperation & Development said the global economy is undergoing stronger growth underpinned by a rebound in trade, higher investment and buoyant job creation.
Nonetheless, the OECD emphasized significant risks posed by trade tensions, financial market vulnerabilities and rising oil prices to global economy.
In the latest Economic Outlook, the Paris-based think tank said the global economy is set to grow 3.8 percent this year and 3.9 percent in 2019. In March, the agency had projected 3.9 percent growth for both 2018 and 2019.
OECD Secretary-General Angel Gurria said the current recovery is still being supported by very accommodative monetary policy, and increasingly by fiscal easing, suggesting that strong, self-sustaining growth has not yet been attained.
“Policymakers need to put greater focus on structural policies to boost skills and to improve productivity to achieve strong, sustainable and inclusive growth,” Gurria added.
According to the latest forecast, growth in the OECD area is set to remain around 2.5 percent per annum, helped by fiscal easing in many economies.
Largely due to a substantial fiscal boost, the United States will expand 2.9 percent in 2018 and 2.8 percent next year, the agency said.
Eurozone is forecast to grow 2.2 percent in 2018 and 2.1 percent next year as accommodative monetary policy, fiscal support and improving labor markets are supporting domestic demand.
Germany’s GDP growth is forecast to be 2.1 percent each in 2018 and 2019, while France’s growth is seen at 1.9 percent for both this year and next.
Economic growth in the U.K. is projected to remain moderate at 1.4 percent in 2018 and 1.3 percent in 2019, owing to high uncertainties about the outcome of Brexit negotiations.
Underpinned by exports, business investment and private consumption, Japan’s economy is projected to grow 1.2 percent in 2018 and 2019.