The Organization for Economic Cooperation and Development (OECD) has said that though developed economies are staging a comeback after years of lagging growth, a slowdown in emerging countries will keep global growth low this year.
In its interim assessment, the organization was more upbeat than it has been in recent years, as debt and financial crises in Europe and the US hammered growth.
But it called on central banks, particularly in the United States, to continue with the loose monetary policies that have been credited with helping economies rebound.
Already, it said, expectations that the US would ease its monetary stimulus program have caused an increase in long-term market interest rates and started weighing on emerging economies. With unemployment in many parts of the world still high, businesses and consumers still need the low interest rates and easier access to loans that loose monetary policy provides, the report said.
A sharp pullback could sink the recovery.
In addition, while the OECD noted that the economy of the countries that use the euro has come out of recession, it warned that the region is still fragile and could drag down global growth.
The report predicted that the three biggest euro economies - Germany, France and Italy - would grow by an average of 0.4 per cent this year.
The report predicted growth in the US would be around 1.7 per cent, down slightly from its estimate of 1.9 per cent in May.