May 6, 2014 - 16:29 AMT
PanARMENIAN.Net - The global economy will grow by less than expected this year as growth in developing economies slows, the Organization for Economic Cooperation and Development (OECD) predicts, according to BBC News.
It expects 3.4% world growth this year, down from its 3.6% November forecast. In 2015, however, it still expects growth of 3.9%. The Organization cut forecasts for China and the U.S.
"We are still not out of the woods yet," said OECD Secretary General Angel Gurria.
"The underlying picture continues to be of strengthening growth momentum in the major advanced economies," the OECD said in its latest economic outlook report.
"However, still-high unemployment in many countries and the subdued pace of growth in many emerging market economies relative to past norms are likely to limit the momentum of the recovery," the OECD added.
The OECD now forecasts 7.4% growth in China for this year, down from its 8.2% November forecast.
Meanwhile, the US economy is forecast to grow 2.6% this year against last November's 2.9% estimate, because of a combination of bad weather in December and October's government shutdown.
However, it increased its forecast for the euro area, predicting growth of 1.2% against its November forecast of just 1%.
Despite the increase in its growth forecast, it warned that the European Central Bank needed to take action to protect itself against the risk of deflation. It suggested cutting its main interest rate to zero and said it should also consider bond purchases similar to those by the Federal Reserve.
In the UK, the OECD predicted growth of 3.2% for this year, up from its November forecast, and said it also expected unemployment to fall further.