Fitch Ratings told Reuters on Tuesday that upgrades of any major economy are unlikely in 2021 despite recent developments related to COVID-19 vaccination, and that countries in Latin America, the Middle East and Africa show the highest level of vulnerability to further negative action in the coming year.
“The two regions that have already seen the most rating downgrades (Latin America and Middle East & Africa) display the highest level of vulnerability to further negative action, with 9 and 12 Negative Outlooks respectively”, Stringer said.
Countries hit hard by the coronavirus will see the maximum economic boost from an effective vaccine which is rolled out swiftly in the first half of next year, Brian Coulton, Fitch’s chief economist told Reuters.
“All developed countries will clearly benefit (from a vaccine) but the UK, Spain, France and Italy were among the hardest hit in H1 2020 and the UK and the EU (European Union) have placed very large pre-orders of the Pfizer, Moderna and Oxford-AstraZeneca vaccines”, he said.
Coulton also said that the start of 2021 will be weak in Europe and the United States as a result of recently tightened restrictions and that the clearest benefits in annual growth numbers will be seen in 2022.
Fitch’s chief economist said that the rating agency expects a slower vaccine roll out in emerging markets as the logistics of rolling out mass immunization programmes could be more challenging, while vaccine pre-orders have been more modest.
Global gross domestic product recovery will strengthen from mid-2021 with vaccine rollouts now looking imminent, the agency noted.
Moody’s told Reuters last week that most sovereigns face a “significant negative shock” from the pandemic while S&P Global said in October that some of the world’s top economies could see their credit ratings cut or put on downgrade warnings in the coming months.
Reference: CNBC
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