The global economy is expected to grow at a faster clip than earlier projected at 4.6 per cent this year, on the back of the buoyant Asian recovery, said the Organisation for Economic Cooperation and Development (OECD).
The grouping of the developed countries, however, has warned that massive government debts in many developed nations and the possibility of overheating in emerging economies, pose serious risks to this growth projection.
In its economic outlook released today, the OECD upgraded its world economic growth forecast mainly on account of widespread recovery.
The global economy is now anticipated to grow 4.6 per cent in 2010 compared to the grouping's November projection of 3.4 per cent. Further, 2011 growth forecast has been raised to 4.5 per cent from earlier estimate of 3.7 per cent.
"The global recovery has become increasingly widespread over the past year...Global output growth is expected to be around 4.75 per cent this year," the report said.
The OECD said recovery in Asia is likely to remain buoyant primarily on account of the strong macroeconomic policy response in the region.
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The OECD, comprising 30 nations including the US and Japan, is expected to expand 2.7 per cent this year and 2.8 per cent in 2011.
"A first substantive risk is related to developments in sovereign debt markets. While originating in some Eurozone economies, instability has spread to other Eurozone members and sovereign debt markets in other parts of the world," OECD Chief Economist and Deputy Secretary-General Pier Carlo Padoan said.
The report pointed out that overheating in emerging economies also poses a serious risk. "Risks to the global recovery could be higher now, given the speed and magnitude of capital inflows in emerging market economies and instability in sovereign debt markets," it added.