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Tourism recovery won’t be in the cards: Fitch Solutions

Struggling emerging markets include Egypt, Turkey, Thailand, South Africa and Vietnam

By: Business Today Egypt

Sun, Mar. 28, 2021

Tourism recovery doesn’t seem to be in the cards, according to Fitch Solutions, whose recent report notes that Egypt will be among five emerging markets expected not to see recovery in their tourism sector in 2021.

The comments came within Fitch Solutions' global macroeconomic update report that was announced in a virtual event held on Thursday.

The struggling emerging markets include Egypt, Turkey, Thailand, South Africa and Vietnam.

Although the report shows that during 2021 emerging market economies will strengthen after a difficult 2020, it excluded Egypt from markets expected to see positive indices in 2021 regarding inflation, commodity prices, reforms and the vaccines' roll out.

It set six key themes that are expected to shape the recovery in emerging markets, adding that many emerging markets will falter in the first quarter of 2021 before gaining strength later in the year.

Moreover, the pace of vaccine rollouts will determine the pace of economic normalization, while commodity prices will mostly boost oil exporters during 2021, but provide little support elsewhere.

According to Fitch Solutions, fiscal policy will normalize faster in emerging markets than in developed markets meanwhile, the emerging markets' monetary policy is expected to remain loose in 2021 and 2022.

They also stressed that the COVID-19 shock will create lasting damage across emerging markets, though the scale will vary significantly.

Fitch Solutions expects the global economy to grow by up to 5.6 percent in 2021.

On the positive side, Fitch expected manufacturing output, which grew strongly in most emerging markets in late 2020, and is to continue in 2021 especially, with the activity rising in January 2021 in most of these economies.

The latest Purchasing Managers Indices (PMI) also point to strong performances in February, according to Fitch.

Retail figures suggest that consumer-facing sectors continued to falter in early 2021, driven by the lockdown measures and consumer fears that continue to weigh on spending in most countries, states Fitch, with emerging markets' consumers remained pessimistic in the first two months of 2021.

It also expected retail sectors to continue to underperform manufacturing sectors as long as, vaccination rollouts remain limited and prevent the re-opening of economies.

Fitch also expected the gradual vaccines' roll out to slow down the recovery process in emerging markets in the first half of 2021.