Global GDP growth is likely to be supported by the realisation of pent-up consumer and investment demand in the US, but it will still not lead to a significant rebound for the next two years, as slowdown in China, Eurozone, Brazil and South Africa drag, Moody's said on Monday.
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.
"US growth is likely to accelerate as pent-up consumer and investment demand is realised," Moody's Investors Service said in its quarterly Global Macro Outlook report.
"Global GDP growth is unlikely to rebound significantly in the next two years, as a gradual slowdown in the Chinese economy and structural impediments in the euro area, Brazil and South Africa continue to weigh on economic activity," Moody's said.
Moody's expects robust growth from UK and India as well over the next two years, adding to the US-led positives.
Moody's said it expects robust growth in the US over the next two years (+3% and +2.8% in 2015 and 2016 respectively), as strong job creation and favourable financing conditions create an environment conducive to realise pent-up demand for consumption.
"Strong profits and low external financing costs will continue to foster investment by US companies, whilst relatively brighter growth prospects in the US will tend to favour investment at home rather than abroad," the rating agency said.
Data on Friday showed that the US unemployment rate dropped to a six-year low of 5.8% in October, revealing the strength of the labour market of the world's largest economy.
According to Moody's, most factors that have weighed on global GDP growth in 2014 will remain in place in the next two years, including the gradual slowdown in China, which has led to a very sharp deceleration in its imports and has dampened export growth globally.
"Moreover, structural deficiencies in some countries and regions - including the euro area, Brazil and South Africa - are also preventing a significant rebound in growth," said Marie Diron, a Moody's Senior Vice President, who authored the report.
Moody's said these domestic factors are impinging on economic activity to a greater extent than previously envisaged and have driven a downward revision in Moody's 2015 forecasts for many countries and regions, including the euro area, Japan and Brazil.
Slower exports to China have exacerbated underlying weaknesses of Brazil, the rating agency said, and added that the same leaves its GDP growth forecasts of around 1% in 2015.
"An elevated level of government debt limits the room for fiscal stimulus measures, whilst high inflation constrains the central bank's ability to ease monetary policy in support of growth and hampers purchasing power and consumption," Moody's said.
Moreover, under-investment has resulted in deficient infrastructure. Reforms to address these deficiencies will take time to come to fruition and hence have a limited visible effect on GDP growth
over the next two years, the rating agency said.