OECD raises growth forecasts but warns of instability risk


The Organisation for Economic Co-operation and Development has sharply upgraded its growth forecasts for the eurozone, in the latest sign that low oil prices and the European Central Bank's quantitative easing project have lifted hopes for the region's recovery. In its Interim Economic Assessment, the OECD said it now expects the eurozone to grow by 1.4% this year and 2% in 2016. This is 0.3 percentage points faster than previously anticipated for both years and in line with the latest forecasts from the ECB. The OECD also raised its predictions for global growth, forecasting Japan and India will expand more than previously thought. But its economists warned that the environment of low inflation and interest rates creates a growing risk of instability. 'Mispricing of risk was at the heart of the previous financial crisis, and such mispricing may be in evidence again,' it cautioned.


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