The global recession caused by the Coronavirus pandemic led to a record 32 credit rating downgrades in 2020, according to ratings agency Fitch.

Progress in financial accountability in different countries can be seen at a glance and compared using a new international index.

The tripling in negative rating actions from 11 in 2019 came as global GDP contracted by 3.4%, the largest fall in the post-war period, the ratings agency said in a report.

Overall, only two nations reported credit rating upgrades last year, down from 13 the previous year, Fitch said.

The report said: “The consequent downgrade to upgrade ratio of 16 to 1 reflected the scale of downgrade activity, compared with the 0.8 to 1 recorded pre-pandemic.

“By comparison, the global financial crisis saw a ratio of 7 to 1 in 2009.”

The majority of downgrades (26) came from emerging markets last year, as nations struggled to manage increased debt levels resulting from Covid-19 support packages, Fitch said.

Six developed nations had their ratings downgraded last year including the UK, Canada and Italy, with the North American nation losing the top-rated ‘AAA’ rating, Fitch said.

These downgrades the economic and public finance impact of the pandemic, including sharp rises in fiscal deficits, it said.

Of the 32 downgrades, 11 were multiple reductions to a nations credit rating, all in emerging markets, including South Africa, Sri Lanka and Oman, according to the agency.

The report said: “Sovereign credit profiles across all regions were impacted to varying degrees by both the direct implications of the pandemic in terms of government lockdowns and healthcare responses and the indirect effects, in terms of stimulus spending to support economies and protect jobs.”

A record five nations defaulted last year, due to a combination of debt agreements and missed payments – all were rated low speculative-grade at the beginning of the year with an average rating of ‘CCC’, Fitch said.

This included Argentina, which defaulted for the second successive year, as it missed interest payments on previous debt agreements, the report said.

The other nations to default in 2020 were Ecuador, Lebanon, Suriname and Zambia.