The outlook for the world economy has improved in the early months of 2015 as a result of lower oil prices and the provision of additional stimulus by several central banks, the Organization for Economic Cooperation and Development said on Wednesday.

But the Paris-based research body warned an “over-reliance” on monetary policy to support growth holds dangers for the stability of the financial system, including excessive risk taking and borrowing, and foreign-exchange rates that don’t reflect underlying economic circumstances.

The OECD said the U.S. dollar’s appreciation against other major currencies is contributing to low inflation in the world’s largest economy and could weaken growth by damping exports. It therefore expects the U.S. Federal Reserve to delay its first rise in interest rates, which many economists have been expecting to take place in June, until there are signs that Europe’s economies are strengthening, and the euro is set to appreciate.

“The question about when the Fed is going to move off of zero depends a lot on whether Europe rebounds,” said Catherine Mann, the OECD’s chief economist, in an interview with The Wall Street Journal.

In the first update to its projections in 2015, the OECD said it now expects the economies for which it provides forecasts–which account for 70% of global output–to grow by 4% this year and 4.3% next. In November, it forecast growth rates of 3.9% and 4.1% for those years.

The OECD noted that central banks that regulate economies accounting for 48% of global output have eased their policies since December, providing a boost to growth. The decline in oil prices has also helped, it said.

The European Central Bank is one of those that has eased policy in recent months, launching on March 9 a program that will see it buy more than EURone trillion ($1.06 trillion) of mostly government bonds by September 2016.

The OECD said the stimulus will help boost economic activity and raised its forecasts for eurozone growth to 1.4% in 2015 and 2.0% in 2016 from 1.1% and 1.7% previously, roughly in line with the ECB’s projections. But it said that for the recovery to be sustainable, governments will have to press ahead with needed economic reforms, and a new program of investments in infrastructure.

“This should not be viewed as an excuse for policy makers to sit on their hands,” Ms. Mann said.

For similar reasons, it raised its forecasts for Japanese growth to 1% this year and 1.4% next, from 0.8% and 1% respectively. The OECD also urged Japan’s government to show “greater ambition” in its efforts to reform the economy.

The research body nudged down its forecasts for Chinese growth this year, but its largest changes were reserved for two other big developing economies. It raised its growth forecasts for India to 7.7% this year and 8% next from 6.4% and 6.6% respectively, signaling that it now expects the country to overtake China as the fastest-growing major economy.

In contrast, the OECD slashed its forecasts for Brazil, seeing the economy contracting by 0.5% this year, having previously projected growth of 1.5%.

But while it raised its growth forecasts for some large economies, the OECD warned that the threat posed by very low rates of inflation, and in many cases falling prices, “are growing.” It said it is now possible that prices will be falling in all five of the world’s largest economies during the first half of this year, a situation it said “would be unprecedented.”