Global July default rate falls to 5.5 pct -Moody's

NEW YORK Aug 5 (Reuters) - The global high-yield default rate fell to 5.5 percent in July from a revised 6.2 percent in June and will continue falling sharply despite a sluggish economy, Moody's Investors Service said on Thursday.

The global default rate will slip to 2.6 percent by the end of the year and 1.8 percent a year from now, the rating agency said in a report.

Defaults have tumbled as a healing of the global financial gave companies access to funding and as a recovering economy boosted profits.

"Absent a substantial retreat in available financing, the global default rate will continue to slow," Albert Metz, Moody's director of credit policy research, said in the report. "The apparent softness in the economic recovery will not be enough to re-accelerate the default rate."

The U.S. speculative-grade default rate fell to 5.4 percent in July from a revised 6.4 percent in June and is expected to fall to 2.1 percent over the next year.

Just 34 Moody's-rated issuers have defaulted this year, down from 196 in the same period in 2009. (Reporting by Dena Aubin; Editing by James Dalgleish)