BEIJING, April 2  -- China's considerable fiscal and external buffers provide time for structural reforms to gain traction, global rating agency Moody's Investors Service said on Thursday.

"Fiscal and monetary reforms are underway. But the fundamental restructuring and rebalancing process will be a multi-year endeavor, extending into the second half of this decade," Moody's said in a report.

Following the global financial crisis, China's economic growth has slowed and systemic leverage has risen, casting a shadow on China's economic prospects. During the annual session of the National People's Congress, China's top legislature, in March, Premier Li Keqiang pledged a "new normal" of slower and sustainable economic growth, it noted.

The Chinese economy posted a 7.4-percent growth in 2014, its weakest since 1990. The annual growth target set by the government was lowered to around 7 percent for 2015, but more stress was laid on better-quality growth.

Moody's predicted that China's real gross domestic product (GDP) growth will continue to slow into a 6.5-7.0 percent range this year and next, while inflation remains in a low and single-digit range. This assumes targeted policy measures will continue to cushion downward macroeconomic effects caused by the reining in of credit.

Downside risks for the economy are reflected in local government liabilities, property sector weaknesses, industrial overcapacity and state-owned enterprise debt, according to the report.

China's fast economic growth in past years relied to a large extent on investments and credit expansion.