Jakarta. Global rating agency Moody's Investors Service sees a persistent decline in labor productivity growth, stemming from an aging population and slow investments, as posing a key threat to global — and Indonesian — economic recovery.

The agency's report, titled "Collapse of Global Productivity Growth Remains Sizable Risk to Credit Conditions," published on Thursday (04/05) said global labor productivity growth fell to an average 1.7 percent in the post global financial crisis years of 2011-2015, compared to an average 2.6 percent between 1995-2007.

In 2016 alone, labor productivity growth slowed to just 1.2 percent.

Moody's said if productivity growth remains unchanged, global economic growth next year might be as low as 2.5 percent, significantly lower than previous estimates of 3.5 percent.

"Despite the cyclical uptick, we expect global growth to remain significantly below pre-crisis levels in the near term, driven by slower growth in both employment and labor productivity," Elena Duggar, Moody’s associate managing director, said on Friday (05/05).

According to Duggar, a combination of factors has caused the productivity growth slowdown, including an aging population, declining growth in human capital and education and mismatched skills related to new workplace technologies.

Weak investment in the post-crisis period can be attributed to credit constraints, an overall sense of business pessimism and an elevated policy uncertainty, which also contribute to slowing labor productivity, Moody's said.

Long-term factors of slow technology diffusion and a stagnation of new, lean firms entering the global marketplace have also contributed to an economic slowdown.

However, the rating agency said economic growth in Indonesia could reach as high as 5.1 percent this year and 5.2 percent in 2018 if productivity levels continue on current trends.

Duggar said the global financial crisis "exacerbated" the slowdown in productivity growth but the ultimate causes of the economic downturn are still subject to much debate.

Ultimately, though, a slowing of productivity rates is a long-term phenomenon, one that predates the 2008 financial crisis, according to Duggar.