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Covid will haunt global economies in 2021: Moody's

Moody's Investors Service on Thursday said the credit downturn arising out of Covid-19 will be short-lived but most economies will not return to pre-pandemic activity levels until 2022.

Covid will haunt global economies in 2021: Moody’s
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Covid will haunt global economies in 2021: Moody’s

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New Delhi: Moody's Investors Service on Thursday said the credit downturn arising out of Covid-19 will be short-lived but most economies will not return to pre-pandemic activity levels until 2022. It expects a slow and bumpy global recovery and uncertainty around the macroeconomic outlook remains much higher than usual.

In the year since the World Health Organisation (WHO) declared Covid-19 a pandemic on March 11, 2020, the virus has disrupted the global economy and triggered a credit downturn accompanied by a spike in bond defaults, it said.

"The credit challenges arising from Covid-19 have been substantial, but the credit downturn likely will be relatively short-lived. Risks remain more significant for the sectors most vulnerable to restrictions on their normal activities," Moody's said in a global report in coronavirus.

It said policy actions will continue to support economic activity and financial markets after the pandemic has eased, it added. Policymakers will continue to support economic activity long after the pandemic has faded, in some cases for years, Moody's said. Moody's expects the incidence and prevalence of the pandemic to gradually decline over the course of this year, as vaccination numbers rise.

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