Moody's doubts Russian, world economy will rebound in 2015

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Global GDP growth is unlikely to rebound significantly in the next two years, as a gradual slowdown in the Chinese economy and structural impediments to growth in the euro area, Brazil and South Africa continue to weigh on economic activity, Moody's Investors Service says in its quarterly Global Macro Outlook report.

For the G20 economies as a whole, the rating agency expects GDP growth of around 3% in 2015 and 2016, after 2.8% in 2014.

Moody's forecasts no rebound in growth in Russia in 2015. Instead, the rating agency expects it will record a shallow recession, followed by economic stagnation in 2016. The conflict and associated sanctions have exacerbated a downward trend in GDP growth, the result of years of under-investment in non-energy sectors and diminishing efficiency and increasing costs of oil and gas extraction.

Russia's Central Bank said on Monday that GDP would fall 3.5%-4% in 2015 if oil prices drop to $60 per barrel, according to the bank's updated draft on the guidelines for the single state monetary policy in 2015, 2016 and 2017.

In the euro zone, Moody's expects GDP to rise by less than 1% and by 1.3% in 2015 and 2016 respectively, after 0.7% in 2014. Generally, slow progress on economic reforms, continuing high levels of corporate debt relative to GDP in certain countries such as France and Spain and uncertainty about geopolitical developments in Ukraine and growth prospects in China will continue to weigh on fixed asset investment in the euro area.

In contrast, Moody's forecasts UK GDP growth of around 2.5% in 2015 and 2016, with a number of factors sustaining growth at robust rates.