Finland Times

In its new report, the OECD estimated the global growth at 3.4 percent in 2014, down from an initial forecast of 3.6 percent due to risk from high debts in developed countries and possible overheating in emerging countries.

In 2015, the figure was set at 3.9 percent, it added.

"The recovery from the great recession has been slow and arduous, and has at times threatened to derail altogether. The major advanced economies are finally gaining momentum...," thanks to improved confidence in private sector and rebound in investment and trade, said Rintaro Tamaki, OECD Deputy Secretary-General and Acting Chief Economist.

"However, still-high unemployment in many countries and the subdued pace of growth in many emerging economies relative to past norms are likely to limit the momentum of the recovery," he added.

The new report shows that the 34-member OECD area are expected to grow 2.2 percent this year before expanding by 2.8 percent in 2015 "boosted by accommodative monetary policies, supportive financial conditions and a fading drag from fiscal consolidation."

However, the unemployment rate among the organization's member states would witness modest decline with additional 11.5 million unemployed people were expected to enter the labor market by the end of next year.

With a growth estimate at 2.6 percent compared to 1.9 percent in 2013, the United States "should gain pace, lowering unemployment and reducing economic slack, with inflation rising close to target," according to the report.

Japan's economy was set to see a rebound at an annualized rate of 1.5 percent as "an upturn in exports, as world trade picks up, will also support the expansion," but "given its high level of public debt, a credible medium-term fiscal consolidation plan is essential."

The outlook for the eurozone points to a continued recovery with "confidence improves further, financial market fragmentation declines and fiscal consolidation eases."

However, "there is a risk that inflation could weaken further if growth disappoints, or the euro appreciates further, or inflation expectations become unanchored," the Paris-based organization said.

It recommended European leaders to energize efforts to have healthy banking sytems, complete the establishment of a fully fledged banking union and sustain reform momentum.

The OECD report also showed renewed divergence between members of the single-currency bloc. Growth in Germany was expected to strengthen, while France would register "modest expansion," with its gross domestic product (GDP) projected to rise by around 1.5 percent in 2015.

"On the other hand, the pace of growth in the major emerging market economies has slowed. Part of this deceleration is benign, reflecting cyclical slowdowns from overheated starting positions," Tamaki said.

"The growth rates now seen in China are undoubtedly more sustainable from both economic and environmental perspectives than the double-digit pace of a few years ago. However, managing the credit slowdown and the risks that built up during the period of easy global monetary conditions could be a major challenge," he noted.

The OECD expert also recommended most countries to reduce public debt to more managing future pension and health spending pressures "to ensure the sustainability of public finances without compromising the quality of public services."