Recovery is gaining speed

ECONOMIC growth will be sluggish this year but will pick up in the next two, says the Organisation for Economic Co-operation and Development.

A leaked report of its Economic Outlook says its 30 member nations will grow by 2% this year, 3% next year and 3.1% in 2005.

Its forecast for Britain is revised upwards from 2.6% to 2.7% for next year, still below the Treasury's forecast of 3% to 3.5%.

This is behind the 4.2% forecast growth for the US, but trumps the outlook for Germany (1.5%) and France (1.7%). Expected Japanese growth has been raised from 1.1% to 1.8%.

The CBI is also taking a more bullish stance on the UK economy. It has raised its forecasts for growth from 2.4% to 2.8%.

Though the world's major economies are regaining strength, the outlook for public finances is not so rosy. The OECD expects the US will have a budget deficit of 5.1% of GDP next year.

Japan's deficit is put at 6.8%, while the shortfall in the eurozone is seen at 2.6% and 2.9% in Britain.