Moody's issues downbeat forecast for world economic growth

Ratings agency Moody's has forecast muted growth for the world economy this year and next.

Its baseline forecast for G20 GDP growth is at 2.7% this year, rising to around 3% in 2016, compared to 2.9% in 2014.

"The recovery in the US and, to a lesser extent, the euro area and Japan, will be offset by the ongoing slowdown in China, low or negative growth in Latin America and only a gradual Russian recovery from its recession this year," said Marie Diron, senior vice president, credit policy.

"A sharp or long-lasting correction in asset prices in China is one of the risk factors which could result in lower G20 growth than in our baseline forecasts."

The firm says major economies have still not shaken off the legacy of the financial crisis, and will not return to their former growth averages for another five years.