Developed economies are recovering from an economic slowdown in late 2012, but Europe is lagging behind, the Organization for Economic Co-operation and Development said on Thursday.

In its Interim Economic Assessment released today, the Paris-based think tank said the continuing crisis in the euro area is delaying a meaningful recovery. The OECD predicted 2.4 percent growth during the first quarter for G7 economies and 1.8 percent expansion in the June quarter.

According to the OECD, the three largest euro area economies - Germany, France and Italy - are set to grow by 0.4 percent during the first quarter and by an additional 1 percent in the second. However, the report also indicates a renewed divergence between growth in Germany and the euro area economies.

"The global economy weakened in late 2012 but the outlook is now improving for OECD economies," OECD Chief Economist Pier Carlo Padoan said. "Bold policy action remains necessary to ensure a more sustainable recovery, particularly in the euro area, where growth is uneven and remains slower than in other regions."

The biggest euro area economy, Germany, is forecast to grow by 2.3 percent in the first quarter and by 2.6 percent in the next three months. Meanwhile, the French economy is expected to log 0.6 percent contraction in the first quarter, followed by a 0.5 percent rebound in the second.

Italy's real GDP is expected to drop by 1.6 percent in the first quarter and by an additional 1 percent in the three months to June. Weak growth and low confidence are expected to com?plicate efforts to bring down high unemployment rates across much of Europe, the OECD said.

Outside Europe, the U.S. economy is expected to stage a rebound with 3.5 percent growth in the first quarter of 2013 before returning to moderate growth of 2.0 percent in the following three months. Canada is forecast to grow by 1.1 percent in the first three months of the year and 1.9 percent during the second quarter.

Japan's growth is forecast to gather steam to 3.2 percent pace during the first quarter and ease to 2.2 percent in the second. The U. K. economy is expected to grow by 0.5 percent during the first quarter and 1.4 percent in the second.

Padoan noted that the employment situation is deteriorating in many countries and it is all the more urgent to implement the labor and product market reforms that can stimulate growth and create jobs.

Regarding policy stimulus, the OECD said it is necessary, but varies across countries. "In the United States, the commitment of the Federal Reserve to keep policy rates low until labor market outcomes improve substantially is well judged, but the need for further exceptional monetary measures is waning, while in Japan more aggressive policy action is required to escape deflation and achieve the Bank of Japan's new 2 percent inflation target," Padoan said. "In the euro area, there is still some scope to ease monetary policy further, given weak demand and inflation well below the ECB's objective, while further action is needed to repair the transmission mechanism.

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