Global rating agency Moody’s Investors Service sees a persistent decline in labour productivity growth, stemming from an ageing population and slow investments, as posing a key threat to global economic recovery.
The agency’s report, titled “Collapse of Global Productivity Growth Remains Sizable Risk to Credit Conditions,” published last week said global labour productivity growth fell to an average 1.7% in the post global financial crisis years of 2011-2015, compared to an average 2.6% between 1995-2007, Moody’s.com reported.
In 2016 alone, labour productivity growth slowed to just 1.2%. Moody’s said if productivity growth remains unchanged, global economic growth next year might be as low as 2.5%, significantly lower than previous estimates of 3.5%.
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