PARIS, Sept 2: The Organisation for Economic Cooperation and Development on Tuesday raised its forecast for US economic growth this year but cut its estimates for Japan and the eurozone, and said Britain faced recession.

The OECD, the Paris-based grouping of 30 developed countries, said the US economy would expand 1.8 per cent in 2008, a sharp upward revision from a prediction in June of 1.2 per cent.

Japan would grow 1.2 per cent instead of 1.7 per cent and the eurozone would expand 1.3 per cent instead of 1.7 per cent, the organisation said in an interim assessment of leading OECD countries.

The combined group of seven nations — Britain, Canada, France, Germany, Italy, Japan and the United States -- would grow 1.4 per cent, unchanged from the last analysis by the OECD in June.

In a statement, the OECD said “financial market turmoil, housing market downturns and high commodity prices continue to bear down on global growth. The eventual depth and extent of financial disruption is still uncertain” in the fallout from the US subprime home loan crisis, it added. Overall, activity was likely to remain weak through to the end of 2008, with the picture “particularly unclear.” The revision to the 2008 US figure was mainly due to an unexpectedly strong second quarter, which the US government last week restated at 3.3 per cent over 12 months instead of 1.9 per cent as announced initially.

This performance was due in part to the external trade balance and partly to fiscal stimulus, which was seen quicker than expected, Jean-Louis Schneider, deputy director of the OECD economics department, told AFP.

In the third and fourth quarters, the US economy, the world’s biggest, should grow 0.9 per cent and 0.7 per cent but these forecasts contain great uncertainty. The OECD does not exclude the possibility of a US recession but we do not have projections for negative growth in the next quarters, Schneider added.—AFP