Global credit conditions are likely to improve overall in 2021, aided by unprecedented fiscal and monetary policy support in the wake of the Covid-19 crisis, Moody’s Investors Service said on Monday.

However, the initial, rapid economic rebound is giving way to a patchier, more tenuous recovery, as the pandemic proves hard to contain.

In a new report, Moody’s examined six key themes that will shape the credit environment in the year ahead: uneven recovery, policy challenges, rising debt levels, digital transformation, environmental impact and social trends.

“The vast policy support from the governments since the start of the crisis will propel a stronger economic recovery in advanced markets than in many emerging markets, and business and operating conditions will continue to be steadier for sectors that have more easily adapted to the pandemic-related disruption,” said Moody’s Associate Managing Director Elena Duggar.

“However, even in countries that have managed to minimize the public health crisis, below-normal external demand and a slow rebound in services sectors will dampen the pace of the recovery.”

Debt in the coronavirus downturn and recovery will likely rise faster and further compared to previous recession cycles, Moody’s said.

Unlike typical recession periods when the growth of private-sector debt slows, debt growth will accelerate for many sectors through 2021, the research report added.

The mounting debt will come on top of the already historically high sovereign and corporate debt levels in many advanced and emerging markets.

According to Moody’s estimates government debt-to-GDP ratios will be on average 20 percentage points higher in the large advanced economies and almost 15 percentage points higher in emerging markets by the end of 2021 from two years earlier.

Political and geopolitical risk will create policy uncertainties, particularly with regard to the direction of the US-China relations, a key issue for the next US presidential administration, and Brexit.

Trade policy that results in a more splintered and protectionist global economy will have supply-chain implications for strategic industries such as technology and pharmaceuticals.

Social issues will attract further prominence in 2021 in public policies, corporate strategies and investment decisions, the agency’s report said.

The uneven effects of the coronavirus across society have heightened focus on racial, income and gender inequality, while longer-term factors such as aging populations and the rising financial clout of millennials are increasingly shaping economic and social trends.