Credit Currents - Moody's Ratings

Inside this episode

Deborah Tan of the Credit Strategy & Research team explains the effectiveness and risks of quantitative easing in emerging markets, while Matt Robinson of the Sovereign group discusses the uneven economic recovery ahead for emerging markets, common factors affecting lower-rated sovereigns and key metrics and trends to follow in 2022 and beyond.

Related Content

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.
• Macroeconomics – Emerging Markets: Quantitative easing programs are largely positive, but risks vary across economies Programs launched at the height of the pandemic have helped stabilize domestic bond markets, provide market liquidity, ease the impact of capital outflows and lower long-term bond yields.
• Emerging Markets – Global 2021 Summit: Recovery uneven across emerging market countries and lagging advanced economies Our virtual summit highlighted the widely divergent recovery we expect across emerging markets, with growth slowing as the pandemic's toll casts a long shadow over the global economy.
• Emerging Markets – Global 2021 Summit: ESG risks are greater for emerging markets than advanced, but vary widely Our virtual summit highlighted the heightened ESG risks for emerging markets, with strong governance an important tool to address social and environmental challenges.
• Emerging Markets – Global 2021 Summit: Energy transition risks and strategies vary among different oil-producing regions Oil producers in the GCC have made greater carbon-transition inroads than those in Latin America, whose debts and government revenue obligations are preventing greater efforts to evolve.

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Welcome to Emerging Markets Decoded! Co-hosted by Ariane Ortiz-Bollin and Thaddeus Best of the Global Emerging Markets team, Emerging Markets Decoded delves into the latest developments impacting the credit environment for emerging market issuers across asset classes. In each episode, Moody’s analysts join Ariane and Thaddeus to explore the ramifications of global macroeconomic and financial market developments, environmental, social and governance risks and other challenges for emerging economies. 

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Inside this episode

Alexander Perjessy and Thaddeus Best of the Sovereign team discuss our forecasts for a protracted recovery of Gulf Cooperation Council economies this year, and the unique availability of these governments to tap into sovereign wealth fund assets to plug their fiscal deficits.

Related Content

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.
• Sovereigns – Gulf Cooperation Council 2021 outlook negative as pandemic curbs fiscal strength, adds to labour challenges The pandemic will dampen oil revenue, extending the deterioration in fiscal strength experienced in 2020, while constraining government spending and slowing the economic recovery.
• Sovereign and Supranational — Sovereigns – Gulf Cooperation Council: Saudi Arabia, Oman most exposed to diminishing fiscal uplift from SWFs  The coronavirus-driven decline in oil demand and prices has significantly increased gross financing requirements for Gulf Cooperation Council (GCC).

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Marie Diron and Daniela Re Fraschini from the Sovereign team discuss our new environmental, social and governance (ESG) sovereign scores and how sustainability issues contribute to credit risks for emerging market countries.

Related Content

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.
• Sovereigns – Global Explanatory Comment: New scores depict varied and largely credit-negative impact of ESG factors Considering exposure to environmental and social risk, governance strength, and financial and institutional buffers, ESG factors commonly have a negative impact on sovereign ratings.
• CROSS-SECTOR RATING METHODOLOGY: General Principles for Assessing Environmental, Social and Governance Risks Methodology This methodology describes our General Principles for Assessing Environmental, Social and Governance Risks.

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Inside this episode

Jaime Reusche and Gabriel Torres of the Sovereign team discuss our negative credit outlook on Latin American sovereigns. Although we expect the region to broadly return to GDP growth in 2021, economic revival will take time and pressure on governments to boost spending on social programs will build in the wake of the coronavirus crisis.

Related Content

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.
• Sovereigns – Latin America & Caribbean: 2021 outlook negative as social pressures rise amid subdued recovery from pandemic Subpar medium-term growth prospects and rising social pressures will challenge governments’ ability to restore lost fiscal space, pressuring creditworthiness in the region. As LatAm sovereigns emerge from the pandemic with higher debt and interest burdens, we expect fiscal strength to weaken.

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Inside this episode

Aurelien Mali and David Rogovic of the Sovereign team discuss the economic and credit implications for Sub-Saharan Africa of weaker global demand and constrained access to financing, as well as how a more diverse creditor base complicates debt negotiations and liquidity relief for countries in the region with lower credit quality.

Related Content

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.
• Sovereign Monitor: Impact of coronavirus on Sub-Saharan Africa, November 2020 
• Sovereign and Supranational - Sub-Saharan Africa: More dispersed creditor base complicates potential debt restructuring negotiations. The willingness of Chinese creditors to accept losses on principal in particular will have important implications for potential losses incurred by bondholders.

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Inside this episode

Anushka Shah of the Sovereign team discusses how the coronavirus is exacerbating income inequality across emerging Asia, which will pose challenges to governments with weak social protection systems and low capacity to raise spending. Also, Matthew Kuchtyak of the ESG team looks at the growing importance of social issues for global investors, as reflected in the recent record issuance of sustainable bonds.

Related content:

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.
• Sovereign and Supranational — Asia Pacific: Pandemic shock will spur income inequality, with credit risks for fiscally weak sovereigns The impact of the coronavirus pandemic will exacerbate income inequality across Asia Pacific (APAC). Governments with constrained fiscal capacity have limited scope to address the resulting social and political strains, which could amplify credit risks.
• Cross-Sector — Sustainable Finance – Global: Record issuance of sustainable bonds in Q3 2020 as green bond volumes recover Global green, social and sustainability bond issuance totalled a record $127.3 billion in the third quarter of 2020, 30% higher than the previous record achieved during Q2 2020.

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Inside this episode:

Michael Taylor and Lillian Li of the Credit Strategy & Research team discuss the rising credit strains on many emerging market countries that are part of the Belt & Road Initiative and the direction of the plan post-pandemic. Plus, analyst Nishad Majmudar talks about our analysis of ESG-related credit considerations in emerging market rating actions across sectors.

Related content:

• Moody's Emerging Markets Hub Bringing clarity to ever-shifting credit dynamics across emerging economies.​​​
• Post-pandemic credit stress points to leaner, greener future for Belt and Road The coronavirus crisis and global economic downturn have exacerbated underlying credit risks that have built up in recent years across many countries that participate in China’s Belt and Road Initiative.
• ESG risks are prevalent in emerging markets, especially in the public sector Environmental, social and governance risks are often higher in emerging markets than in developed markets and debt issuers' capacity to address these risks is often weaker.

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Inside this episode:

Analysts Sarah Carlson, Eugene Tarzimanov and Carolina Chimenti discuss the 2021 credit outlook for sovereigns, banks and companies across emerging market countries. The wide-ranging effects of the coronavirus will continue to be a dominant credit theme, along with still-weak tourism prospects, low oil prices and the rollback of forbearance and fiscal support in a number of countries.

Related content:

• Tentative recovery for global emerging markets in 2021. While we expect a bounce in headline GDP growth, emerging market credit conditions will remain fragile and vulnerable to setbacks. Several important factors, including the ability to restore revenue and earnings and adapt to emerging opportunities and threats, will shape performance across regions, sectors and asset classes.
• Moody's Emerging Markets Hub​ Bringing clarity to ever-shifting credit dynamics across emerging economies.​​

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Inside this episode:

• Lucie Villa of the Sovereign team explains how the path to fiscal repair for many emerging market economies will likely be long and bumpy as revenue generation remains a struggle.
• Plus, William Foster, also of the Sovereign team, discusses whether India’s new fiscal stimulus push will be sufficient to jumpstart the country’s economy.

Related content:

1. Second round of stimulus will provide limited support to growth, highlights credit-negative fiscal constraints
2. Recovering revenue post coronavirus crisis will be crucial but challenging
3. Moody's Event: State of Nations - EMEA and Americas

© 2026 Moody’s Corporation and/or its licensors and affiliates. All rights reserved. Go to www.moodys.com/pages/globaldisclaimer.aspx for complete legal terms and conditions governing use of Moody’s information made available in this video.

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