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The Organization for Economic Cooperation and Development upgraded on Tuesday its real economic growth estimates for Japan to 2.8 percent in 2006 and 2.2 percent in 2007. Its previous projection in November was for 2.0 percent for both years.

The group of 30 developed countries said in its semiannual economic outlook that the world’s second-largest economy has “largely overcome its postbubble problems.”

It also said robust output growth is expected to continue through 2007 on strong domestic demand caused by “rising corporate profits and a reversal of the declining trend in employment and wages.”

The OECD forecasts that Japan’s unemployment rate will be reduced to around 3.5 percent in 2007 from current levels above 4 percent based on “the strength and duration of the upturn” this time and it will “bring a definitive end to deflation” with the inflation rate approaching 1 percent by the end of the 2007.