After years of slowing growth, the rebound is taking hold

The OECD forecasts that total growth amongst its 30 member countries will rise to 2% this year and further improve to 3% the year after.

The think tank said consumers were shaking off worries over jobs and Iraq, while firms were investing again.

The strongest recovery will be in the US, while the rebound in Europe and Japan will be slower and less steep.

Europe's largest economies, however, are told they will have to continue reforming, or be more susceptible to recession in coming years.

Ample evidence

Jean-Philippe Cotis, chief economist at the Organisation for Economic Cooperation and Development, said that "after a drawn-out period of fits and starts, a palpable recovery has finally taken hold."

OECD growth estimates US 2003: 2.9% 2004: 4.2% 2005: 3.8% Japan 2003: 2.7% 2004: 1.8% 2005: 1.8% Eurozone 2003: 0.5% 2004: 1.8% 2005: 2.5% EU 2003: 0.7% 2004: 1.9% 2005: 2.5% Total OECD 2003: 2.0% 2004: 3.0% 2005: 3.1%

"The strong momentum already achieved in Asia, North America and the United Kingdom provides ample evidence of the renewed strength of the world economy."

That will come as a relief to many Western economies, following three years of sputtering growth and slumping stock markets.

To kickstart the world's largest economy US President George W Bush cut taxes, while the country's central bank, the Federal Reserve, set interest rates at the lowest levels in almost half a century.

Europe's largest economies and central bank were criticised by many analysts and business leaders for being slow to react.

Optimism

They seem, however, to have weathered the storm, with countries including Germany emerging from recession and promising tax relief of their own.

Business sentiment is also on the up, according to a poll carried out by the International Chamber of Commerce and the Munich-based Ifo economic research institue.

For the first time this year, those questioned were positive about both the current economic situation and the outlook for the next six months.

Dr Gernot Nerb, Ifo's director of business surveys, said the results, gleaned from 1,000 respondants in 91 countries, could "be interpreted as the onset of the global economic recovery".

Problems

"The OECD says there are however some vulnerable features of the economic outlook," said BBC World Service economics correspondent Andrew Walker.

"The OECD has concerns about debt levels among private individuals in the US, the UK and Australia and among businesses in continental Europe.

"Large deficits in the US government budget and in its trade with the rest of the world are a possible source of instability in the currency markets.