However, the OECD said it expects G7 GDP growth – excluding Japan – to total 2.9% in Q2, up from its previous estimate of 1.3% in November.
The group said underlying inflation rates are still low across the G7, boosting growth, while the private sector is benefiting from healthy balance sheets.
The report took into account developments in the UK and US housing markets which resulted in UK growth prospects being downgraded.
However, the US was upgraded to 3.4% from the 1.6% original estimate.
Pier Carlo Padoan, OECD chief economist, added accelerating private sector investment and a trade boosting recovery has lead to the upward revision.
“Growth perspectives are higher all across the OECD area, and the recovery is becoming self-sustained, which means there will be less need for fiscal or monetary policy support,” added Padoan.
However, the OECD warns instability across the middle east could result in a further hike in the oil price and dent the world economy’s growth prospects.
The OECD did not detail growth projections for Japan after last month’s last earthquake and tsunami.
