Japan, US, Europe Economies To Rise

The Organization for Economic Cooperation and Development said on Tuesday that the global economy will grow by 3.1 percent during 2006 and 2.9 percent next year.

The OECD had forecast a growth of 2.9 percent for the two years in November.

"Expansion is strengthening," the OECD said in its biannual report, adding that consumer demand "is at its highest level since the late 1990s." It also warned that house prices in several countries were too high.

The U.S., eurozone and Japanese economies might "grow slightly above trend" in the next few months. Asia had forged ahead. The Chinese and Indian economies had taken off and Japan had "embarked on a new path" of growth, according to the report.

However, the OECD repeatedly spoke of dangers from global imbalances, principally US trade and current deficits, saying the dollar might have to fall by a third to a half.

The report also said that oil prices had risen by 250 percent since 2002, cutting growth in the OECD area by 1.25 percentage points.

The OECD groups 30 member states sharing a commitment to democratic government and the market economy. It is best known for publications and statistics covering economic and social issues from macroeconomics to trade, education, development, science and innovation.