There may be room for an additional policy rate cut in South Africa from the current level of 6,5%, the Organisation for Economic Cooperation and Development (OECD) said on Wednesday.

In its latest Economic Outlook report, the OECD said that a rate cut was possible, given "the slowdown in inflation, the strength of the currency and the significant slack in the economy."

According to the OECD, growth in the country's economy would receive a temporary boost from the World Cup in mid-2010.

It forecast growth for 2010 at around 3,3% and 5% for 2011.

However, it said that the current account deficit was likely to widen, as imports would grow faster than exports, "but not to pre-crisis levels."

The OECD said that any rate cut by the South African Reserve Bank had to be weighed against still elevated inflation expectations, reflected in surprisingly high wage settlements in 2009.

"As the recovery gains strength, fiscal consolidation should advance at least in line with the plans outlined in the 2010/11 budget."

While South Africa is not a member of the OECD, it is regarded as an enhanced engagement economy.

The organisation added in its report that economic activity in OECD countries was picking up faster than expected, but that volatile sovereign debt markets and overheating in emerging-market economies were presenting increasing risks to the recovery.

Gross domestic product (GDP) across OECD countries was projected to rise by 2,7% in 2009 and by 2,8% in 2011.

"These are upward revisions from the previous November 2009 forecasts of OECD-wide GDP growth of 1,9% in 2010 and 2,5% in 2011."