NEW DELHI : While economic growth has solidified across Asia's emerging markets, the pace of growth will vary depending on country and sector, while the coronavirus pandemic continues to pose the biggest risk in the near term, according to Moody's Investors Service.

"Global economic activity picked up in the first half of the year, but recent data tells us that demand and supply are at risk from coronavirus resurgences in many countries. For emerging markets, lower vaccination rates mean that authorities face the difficult trade-off between reopening economies to support livelihoods and imposing virus restrictions that save lives but dampen economic activity," Atsi Sheth, a Moody's managing director said.

According to the rating agency, G20 GDP will grow by about 6% in 2021, following a 3% decline in 2020, with G20 emerging markets expanding slightly faster this year, at around 7%.

“Corporates, utilities and infrastructure companies across China, India and Indonesia will recover at varying paces, with rebounds hinging on the acceleration of vaccination rates to rein in new coronavirus waves. Sectors that are more dependent on the relaxation of lockdowns and movement curbs, such as airports, face a tougher recovery," the rating agency said.

The rating agency said carbon transition is accelerating across industries, with decarbonization plans and declining wind and solar power costs resulting in renewable output growth exceeding total power demand growth. “In India, the government's push to phase out carbon-emitting vehicles and increase the use of hydrogen fuel will shape investment decisions in this decade," it added.

Moody’s said ultimately, how the post-pandemic economy develops will depend on the actions of governments and the private sector. “Strategies to rebuild revenues and bolster resilience to shocks will differ across entities. Those that do so more effectively will emerge from the pandemic with their credit profiles largely intact," it said.