The Organisation for Economic Cooperation and Development has called for a cut in euro zone interest rates, saying rapid action by euro zone leaders is the key to a global economic recovery.
The OECD also called on countries with stronger public finances to take short-term measures to boost growth.
Days before the G20 group of advanced economies meet for a summit in the French city of Cannes, and just days after a landmark summit to douse the euro zone debt crisis, the OECD called on leaders to take swift action to restore confidence in the markets.
"Much of the current weakness is due to a generalised loss of confidence in the ability of policymakers to put in place appropriate responses," the OECD said in a statement.
"It is therefore imperative to act decisively to restore confidence and to implement appropriate policies to restore longer-term fiscal sustainability..." it added.
The Paris-based body said interest rates should also be reduced where possible to further boost growth. "In the advanced G20 economies, interest rates should remain on hold or, where possible, be reduced, notably in the euro area," the OECD said.
The OECD lowered its forecast for US growth to 1.7% this year from 2.6%, and to 1.8% from 3.1% for 2012.
For the euro zone it now expects 1.6% growth this year instead of the 2% it forecast in May. For next year it now sees 0.3% growth instead of 2%, warning that "patches of mild negative growth" are likely in the euro area, indicating that some countries may see short-term contractions.
