Moody’s said it expects a slow and bumpy global recovery and that uncertainty around the macroeconomic outlook is much higher than normal.
The Moody’s Investors Service said on Thursday that the loan period arising from COVID-19 would be short-lived, but most economies would not return to pre-epidemic activity levels until 2022.
Since the World Health Organization (WHO) declared COVID-19 an epidemic on March 11, 2020, the virus has disrupted the global economy and led to a debt slowdown as well as increased bond defaults.
“The credit challenges arising from COVID-19 are substantial, but the probability of a credit slowdown will be relatively small. Moody’s stated in a global report in Coronovirus that the risks are more important for the most at-risk areas to ban normal activities.
Noting that most economies will not return to pre-epidemic activity levels by 2022, Moody said it expects a slow and bumpy global recovery and that uncertainty around the macroeconomic outlook is much higher than usual.
Economic activities and financial markets will continue to be supported after policy actions. Moody’s said that policymakers would continue to support economic activity after the epidemic had spread in some cases for a long time. Moody’s hopes that the incidence and prevalence of epidemics will gradually decrease during the course this year, as vaccination numbers increase. In turn, this would allow governments to gradually reduce lockdown measures.
However, a residual level of COVID-19 probability will persist over time, increasing the likelihood of a global pocket of risk in areas where vaccination progress is slow, and localized outbreaks.
“Furthermore, new mutations that increase the growth or spread of the virus pose a significant risk to attempts to normalize the conditions. Instead of eradicating the virus, we ‘learn to live with it’ at a lower case rate. Expect
The ratings agency said it took several rating actions in response to the credit results of the epidemic and did not expect to conduct a more wholesale review of credit ratings this year, unless there is a significant setback for the global economy or financial markets, or Is a shock. As a result of a dramatic change in the trajectory of the virus.
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