Recovery prospects look brighter for 2021, but the sequence of the recovery matters. The recent endorsement of the COVID-19 vaccine in the U.S. and other countries supports a potentially faster economic recovery in 2021. However, the vaccine still needs to be effectively distributed and immunization needs to take place before the pandemic fades. Consequently, the short-term outlook still looks challenging, especially for those EM economies where cases are surging again. The recent slowdown in economic activity will probably extend into the first quarter of 2021. This sequence is especially stressful for those governments facing the rising debt and fiscal pressures and for corporations with depressed revenues and limited room to further cut expenses.