KUALA LUMPUR: The COVID-19 global pandemic has the potential to trigger fundamental shifts in the way the world operates and its ways to shape and accelerate economic, business and consumption trends in the coming years.
Moody’s Investors Service managing director and chief credit officer for Asia Pacific, Michael Taylor, said global trade will become more fragmented as the trend towards a more protectionist global economy will likely gain speed with competing economic blocs and new restrictions on trade, investment and technology transfers.
“Attitudes against globalisation will likely further harden and these shifts will alter production, sourcing and trade for many types of goods,” he said in a statement today.
He added that changes in consumer habits and business operations will accelerate technology disruption and while some changes will likely be temporary, others will be more permanent, such as reduced demand for air travel, public transport, in-store shopping and on-site entertainment.
“In this new environment, the largest technology firms will have a clear advantage,” he said.
In terms of the credit environment, he said that it may be some time before the full effects of these trends become clear and although how and when the pandemic will end is unknowable at this stage.
“The COVID-19 shock may leave some permanent scars on the global economy, including a long-lasting slowdown in growth in many countries.
“Income inequality will widen, as will the economic disparity between emerging and advanced economies,” he added. -Bernama
