"lower Oil Prices Won't Boost Global Growth In Next Two Years"

- Lower oil prices would give the US economy a boost in the next two years, but would fail to lift global growth, said Moody's in its quarterly Global Macro Outlook report.

"The US is one of the main beneficiaries of cheaper oil" says Marie Diron, a Moody's Senior Vice President and author of the "Global Macro Outlook: 2015-16. Lower oil prices fail to spur global growth" report. "The favorable economic environment in the US will encourage consumers and companies to spend part of the gains in real income that come from lower energy costs."

Cheaper energy should add to US companies' already strong profits and promote business investment, the report said. The lower oil price reinforced other positive economic factors in the US, including low unemployment and the potential for real wage increases.

While lower oil prices would dampen activity in the US oil sector, the industry was a relatively small part of the US economy, accounting for less than 0.5 percent of total employment.

Stronger US GDP growth and hence imports would alleviate the negative impact of lower oil prices for Mexico and Canada.

Despite lower oil prices, Moody's maintained its GDP growth forecast for the G20 countries at just under 3.0 percent in both 2015 and 2016, unchanged from 2014.

"Lower oil prices should, in principle, give a significant boost to global growth," Diron added. "However, a range of factors will offset the windfall income gains from cheaper energy."

Moody's global growth outlook was based on the assumption that oil prices will average 55 dollars a barrel (Brent) in 2015, rising to 65 dollars on average in 2016. The report assumed that oil prices would stay near current levels in 2015 because demand and supply conditions were unlikely to change markedly in the near future.

Brazil, which imports about as much oil as it exports, was forecast to have its slowest three-year growth period since the early-1990s between 2014 and 2016. Moody's forecasts Brazilian GDP growth averaging zero during that period.

Low employment growth, high inflation and high interest rates would constrain consumer spending, while the Brazilian government's consolidation of public finances would be negative for growth in the short-term.

In China, cheaper oil would not stop the gradual and ongoing economic slowdown. Higher energy taxes and government-controlled prices in some energy and transport sectors would dampen the impact of lower oil prices.

Moody's forecasts that China's GDP growth would fall below 7 percent in 2015 from 7.4 percent in 2014. In 2016, GDP growth was forecast to fall to 6.5 percent.

Moody's forecasts a sharp recession in Russia that would last until 2017. In Saudi Arabia, higher fiscal spending would maintain positive growth and offset the negative effects of lower oil prices.

The report highlighted multiple factors that could lead to lower growth in certain countries, but emphasises that few of these risks would, on their own, have a large global impact. These included a disorderly financial market response to US monetary policy tightening, a longer than forecast fall in China's property market and heightened political uncertainty and deflation or prolonged low inflation in the euro area.