A new report by the Paris-based Organization for Economic Cooperation and Development says the world economy is recovering, but warns against a series of risks, including high energy prices and government debt.
The Organization for Economic Cooperation and Development offered a middling report card for 2011 that is expected to improve next year. It predicts the world economy will grow by 4.2 percent this year and 4.6 percent in 2012 - with emerging economies in Latin America and Asia leading the pace.
The U.S. economy is expected to grow 2.6 percent in 2011 - up from the 2.2 percent the OECD projected in November - and 3 percent next year. The 17-member eurozone is expected to grow by 2 percent for both years. And while Japan's growth will be negative this year, the OECD says the country is rebounding strongly from the devastating earthquake and tsunami that hit the country in March. The Japanese economy is expected to grow 2.2 percent in 2012.
OECD chief Angel Gurría says overall, the world is definitely on the road to recovering from the worst recession in more than half a century.
"With private consumption and investment acting as its engines, growth is becoming self-sustained - that is, less driven by temporary government aid or by external demand," said Gurría.
But Gurría outlined a two-speed growth, with emerging economies like Brazil, China and India forging ahead.
"A key message is that there is no room for complacency," he said. "The crisis is not over yet, it has just changed its skin. Downside risks predominate."
Those concerns include high public debt levels in the U.S., Japan and the eurozone. Gurria also warned against other risks preying on recovery such as a further increase in energy prices and the chance of a Chinese economic slowdown.
The OECD's release of its latest economic report comes as the 34-member organization celebrates its 50th anniversary. The event was attended by a number of high-level officials, including French President Nicolas Sarkozy and U.S. Secretary of State Hillary Clinton.
On Tuesday, the Paris-based organization launched a so-called "happiness index" - which is a new way of measuring countries' well-being through indicators like health, housing, education and employment.