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RECENT OUTLOOKS

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Global credit conditions will improve in 2021, aided by unprecedented fiscal and monetary policy support in the wake of the COVID-19 crisis. The initial rebound will give way to a multispeed recovery, with rising debt levels of companies and governments and business transformation spurred by rapid shifts in consumer and workplace behavior.

Anne Van Praagh

Managing Director, Global Strategy & Resear
Moody's Investors Service

Global Credit Conditions

Global credit conditions will likely improve in 2021

We expect the global economy to continue its recovery from recession in 2021, but global output is unlikely to return to pre-pandemic levels until 2022. Moreover, economic activity will be uneven across countries and sectors, remaining dependent on effective pandemic management and government policy support.

Atsi Sheth

Managing Director - Credit Strategy & Standards
Moody's Investors Service

Global Macro Outlook

Nascent economic rebound takes hold globally but recovery will remain fragile.

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Outlook Summary

The widespread fallout from the pandemic and the measures adopted by sovereigns to contain it have created an economic, fiscal and social shock that will last into 2021 and beyond. While weaker sovereigns will be hardest hit in the short term, we expect that sovereigns across the rating spectrum will face crisis-driven policy challenges over the medium term.

Alastair Wilson

Managing Director, Global Sovereign Risk
Moody's Investors Service

Negative

Global Sovereign Outlook 2021

Negative 2021 outlook as pandemic fallout weighs on economic activity, government finances, complicates policy choices.

Higher quality issuers, particularly in emerging Asia, will navigate 2021 fairly well, supported by strong economic or industry positions and healthy access to capital. But smaller governments and companies that have concentrated revenue streams or significant external funding requirements will endure another year of liquidity and, potentially, solvency stress.

Rahul Ghosh

Senior Vice President - Credit Strategy & Research, Moody's Investors Service
Moody's Investors Service

Emerging Markets – Global

Pandemic will leave lasting scars on credit quality despite tentative recovery.

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Outlook Summary

Public health concerns and shifting work patterns will continue to depress mass transit ridership recovery in 2021. Ridership will grow about 30% but remain well below the levels necessary to balance budgets and incentivize critical government subsidies. Without added external funding, most systems will need to consider reducing service, increasing fares or deficit financing, which will further weaken their ability to generate revenue.

Baye Larsen

Vice President - Senior Credit Officer, Public, Project and Infrastructure Finance
Moody's Investors Service

Negative

Mass Transit - US

2021 outlook negative as operating losses continue into 2022

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Outlook Summary

Although travel demand has increased since its trough in the second quarter of 2020 and may continue to improve in 2021, our negative outlook reflects coronavirus’s ongoing risk to passenger demand and likely large operating losses into 2022. With limited prospects of a strong inflection in travel demand in 2021 unless countries lift quarantine restrictions and approved vaccines can be distributed, maintaining extended coverage of daily cash burn will remain paramount to outlast the wait for vaccines.

Jonathan Root

Senior Vice President, Corporate Finance Group
Moody's Investors Service

Negative

Passenger Airlines - Global

2021 outlook negative as operating losses continue into 2022

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