Concerns for 2021

As we enter 2021, there is a divergence within emerging markets, with North Asia faring better than Latin America. While a systemic sovereign debt crisis is not expected, there may be additional sovereign debt restructurings, albeit concentrated in specific countries. The logistical challenges of vaccine distribution and the uneven availability of vaccines in emerging markets are a significant concern. The potential for a prolonged economic downturn in developing countries, while the advanced world recovers, poses a risk of high interest rates that may exacerbate the challenges faced by emerging markets. Additionally, the lasting effects of the pandemic, such as a fear of social interaction and a slow return to pre-pandemic activities, may impact economic recovery. Small countries heavily reliant on tourism, like those in the Caribbean, face dire humanitarian crises as their main industries suffer.