Growth in the world's largest economies is likely to be slower in 2011 than this year but should pick up again by 2012, the Organisation for Economic Co-operation and Development said in its latest forecast.

It said gross domestic product growth in the 33 membercountrieswaslikely to slow to 2.3 per cent in 2011 from 2.8 per cent this year, before recovering in 2012. Within the eurozone, GDP is likely to hold steady next year after expanding 1.7 per cent in 2010.

Globally, growth was forecast at 4.25 per cent in 2011 and 4.5 per cent in 2012.

However, the OECD warned that global imbalances remained severe, and in some cases were widening again, posing risks to the recovery.

Low interest rates were creating abundant liquidity, much of which was flowing towards emerging markets countries where both expected growth rates and interest rates were higher. But it warned that some countries were taking unilateral steps to protect their domestic economies and that "protracted unilateral action of this sort is likely to have little - or even counterproductive - effects and risks triggering protectionist moves".

The organisation noted that such protectionism could reflect unhappiness over the inability to reach an international consensus on how to address imbalances.

It said there was a need for fiscal consolidation in many countries as part of the rebalancing effort and said this should begin in 2011. Automatic stabilisers such as a safety net for the unemployed should be used as other spending is cut.

The OECD warned that there were significant risks to the recovery, including fragilefinancial markets, continuing household balance sheet deleveraging, sovereign debt problems and tensions in foreign exchange markets.

"Most of the risks are interrelated and if they were to materialise, could generate feedback loops between asset prices, private sector balance sheets and demand and financial sector outcomes," the OECD said.