OECD estimates global GDP growth rose 3.7 pct in 2017

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The OECD added that the tax and public spending reductions in the US during the last three months and Germany's fiscal stimulus were key factors for upgrading global growth predictions in 2018 and 2019.

Another upgrade to world economic growth forecasts, due to tax cuts in the USA, is likely to fire up the debate over the Turnbull government's efforts to cut the company tax rate.

The OECD projects that the global economy will grow by 3.9% in both 2018 and 2019, with private investment and trade picking up on the back of strong business and household confidence.

The OECD expects the global economy will grow 3.9 per cent in 2018, up 0.2 percentage points from its forecast in November.

Releasing the interim report in Paris on Tuesday, the OECD said a key factor behind its upward revision reflects tax reductions and public spending increases in the USA since its previous forecasts made in November.

OECD acting chief economist Alvaro Pereira warned the US President's announced tariffs of 25 percent on imported steel and 10 percent on imported aluminium, had left the global economy vulnerable to a tit-for-tat war.

United States tax cuts, announced by Trump since the OECD's November forecasts, were one reason why the growth outlook was stronger than it was four months ago, the thinktank said.

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"This could obviously threaten the recovery".

Squeezed household incomes and business investment weakened by Brexit mean the United Kingdom is expected to have the weakest growth in the G20 group of major economies. "Certainly we believe this is a significant risk, so we hope that it doesn't materialize because it would be fairly damaging", Pereira said.

Pro-EU Labour MP Chuka Umunna wrote that the growth in each of the three years ahead "is forecast to be far lower" than what was projected before the EU referendum, which he said was "thanks to Brexit". Previously, the OECD had forecast 2.1 per cent and 1.9 per cent respectively.

This resulted in respective percentage point upgrades of 0.2 and 0.3 for this year and next from the OECD's previous forecasts.

In 2019, the same year Britain will leave the European Union following Brexit, the forecast for growth is now set at 1.1%, lagging behind other G20 nations.

In contrast, stronger growth in France and Germany boosted the outlook for the broader eurozone to 2.3 percent for this year and 2.1 percent in 2019.

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