In its 2024 forecast, the OECD sharply raised its forecast for U.S. GDP growth to 2.1% from 1.5%. At the same time, the Paris-based organisation cut its forecast for eurozone growth to 0.6 per cent from 0.9 per cent previously, underlining the divergence in economic prospects between the US and Europe.

Clare Lombardelli, the OECD's chief economist, said the US economy had shown "relatively clear strength" compared with Europe, where countries have struggled in recent years under the twin shocks of tight monetary policy and soaring energy prices.

"We are seeing a mixed picture around the world: a bit of weakness in Europe due to tighter monetary conditions and a more positive outlook in the US." "We are seeing positive news in the U.S. inflation is coming down and recovering real incomes will support consumption growth," Lombardelli said.

The OECD sees US inflation at 2.2% in 2024 and slowing further to 2% in 2025, the central bank's inflation target and the lowest among the Group of Seven (G7). The figures for the eurozone were 2.6 per cent and 2.2 per cent respectively.

The OECD said the biggest economic risk now was "heightened geopolitical tensions", including the potential for the Israeli-Palestinian conflict to spread across the Middle East and disrupt energy markets. The study found that a doubling of transport costs due to disruption in the Red Sea could add 0.4 percentage points to global inflation a year later.

Earlier, Yemen's Houthi armed forces launched an attack on the Red Sea cargo ship, and the United States and other multinational navies broke out a direct conflict. The situation has forced shipping companies to divert around the Cape of Good Hope, increasing journey times by 30 to 50 per cent and taking capacity out of the global market.

Lombardelli said, "It's something we're looking at very closely...... We are already seeing an increase in transportation prices, and if this continues for a long period of time, then it will lead to inflation on the consumer side. At this point we don't expect that to be the case in the long term."

On monetary policy, the OECD said central banks would have to cut interest rates at a slower pace than the path of interest rate hikes starting in 2022. "The decline in inflation creates scope for rate cuts, but the policy stance in most major economies should remain restrictive for some time to come."

The OECD pushed back its forecast for the first rate cut in the US to the second quarter of this year and in the eurozone to the third quarter.