Ratings agency, Moody's has published a paper which highlights that the coronavirus crisis and global economic downturn have exacerbated underlying credit risks in countries that participate in China's Belt and Road Initiative (BRI).
Moody's highlighted that credit stress on these economies will remain pronounced as they confront acute liquidity constraints, revenue shortfalls and in some instances, heightened default risk.
Moody's noted that the BRI is likely to evolve as a result of an acceleration of trade shifts during the pandemic that will prompt greater intraregional connection within the participating countries.
The ratings agency also noted that an increasing number of BRI projects will focus on sustainable infrastructure and digital connectivity amid rising demand.
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