The OECD on Monday cut its economic outlook for the Group of Seven nations in 2014, including Japan, while expecting a moderate expansion to continue in most of the major economies.

In its interim economic assessment report, the Paris-based organization also said the "most worrying feature" of the projections is the continued slow growth in the euro area, where it says the anemic state of demand is reflected in the decline in inflation.

As for Japan, which saw an annualized real 7.1 percent contraction in gross domestic product in the April-June quarter due to the 3-percentage-point consumption tax hike on April 1, the OECD said the economy is expected to expand 0.9 percent this year and 1.1 percent next year, downgraded from its May forecasts of 1.2 percent and 1.3 percent.