The global economy will expand 1.9% this year after the swift end to conflict in Iraq, the Organization for Economic Co-operation and Development is predicting.

With a prolonged war no longer a threat, the risk of worldwide recession has been reduced, forecasts the think-tank in its latest report. As economic conditions stabilise, growth will accelerate to 3% in 2004.

However, there remain many threats to global growth. “Worries about oil prices, anxiety in the face of war, fear of terrorism and epidemics, loss of confidence in international governance - the list of so-called geopolitical and psychological factors is long,” warned OECD chief economist Jean-Philippe Cotis.

There is also the SARS virus sweeping the globe. The impact of the outbreak on the world’s economy remains “difficult to quantify,” continued Cotis, depending on “how promptly and effectively the virus can be brought under control.”

By region, the US will enjoy the strongest growth, predicts the OECD, expanding 2.5% this year then up to 4% in 2004 (though household consumption may suffer).

Britain is in line for 2003 growth of 2.1%, followed by 2.6% next year, while the twelve-nation Eurozone is expected to rise just 1% this year due to large budget deficits, increased oil prices and slow structural reform.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff