S&P Global Projects Stable Credit Outlook for 2026 Amid Challenges

S&P Global Ratings released a report on December 3, 2025, indicating that global credit conditions are likely to remain resilient in 2026. This outlook is largely attributed to sustained economic growth, bolstered by investments in technology. The report, titled “Global Credit Outlook 2026: Music Playing, Noise Rising,” highlights the positive trajectory while acknowledging that the outlook is not uniform across all sectors and regions.

Economic Growth and Credit Performance

The report suggests that the active refinancing observed in 2025 has extended maturities for many borrowers. Additionally, policy interest rates have either decreased or are expected to continue declining, which has fostered a healthy investor appetite. According to Alexandre Birry, global head of Credit Research and Insights, “Performance across sectors and geographies will diverge, and the evolving geopolitical order may continue to introduce unexpected policy shifts.”

Lower inflation rates and stable labor markets are anticipated to support consumer spending in many developed economies. The forecast for global economic expansion stands at 3.2% for 2026, with growth expected to slow in the U.S. and China, while the eurozone continues its recovery and emerging markets maintain resilience. Defaults are likely to remain controlled, albeit slightly above long-term averages.

Sector-Specific Insights and Risks

Corporate earnings are projected to remain healthy, aided by manageable impacts of U.S. tariffs. The expected decline in policy interest rates may reduce the trailing-12-month speculative-grade corporate default rate in the U.S. to 4% by September 2026, down from current levels. In Europe, this rate is anticipated to fall to 3.25% from 3.7%.

As market valuations and investment volumes increasingly reflect assumptions about the transformative potential of artificial intelligence, a surge in data center construction is contributing to economic growth. Nevertheless, this rapid expansion raises concerns about potential overinvestment, which could strain credit conditions in the future.

The backdrop of U.S. policy uncertainty continues to impact the global economic landscape. Although global trade tensions have eased somewhat with new deals, these agreements often lack detail and may prove fragile, creating uncertainty that can hinder investments and consumption. Any unexpected developments in trade or geopolitical relations, as well as shifts in AI investment enthusiasm, could challenge market stability.

On a more structural level, ongoing geopolitical tensions pose risks to supply chains and commodities markets. Conflicts in Russia-Ukraine and the Middle East highlight the fragility of political stability, while the long-term balancing act between the U.S. and China remains focused on trade negotiations amidst broader technological competition.

The insights provided by S&P Global Ratings emphasize both the resilience and the challenges facing global credit markets as they navigate a complex economic landscape. The full report is available to RatingsDirect subscribers on the S&P Global website.