S&P Global Predicts Resilient Credit Outlook for 2026

S&P Global Ratings released its latest report on December 3, 2025, indicating that the global credit outlook for 2026 remains resilient, albeit uneven. The report, titled “Global Credit Outlook 2026: Music Playing, Noise Rising,” highlights several factors contributing to this sustained optimism, including ongoing economic growth supported by technological investments.

According to the report, active refinancing in 2025 has allowed many borrowers to extend their maturities, and with policy interest rates decreasing, investor appetite for credit remains robust. Alexandre Birry, the global head of Credit Research and Insights at S&P, emphasized that while the overall outlook is positive, performance will vary across sectors and regions. He noted that “the evolving geopolitical order may continue to introduce unexpected policy shifts.”

Lower inflation rates and resilient labor markets are expected to bolster consumer spending in developed markets. The report forecasts a stable global economic expansion of 3.2% in 2026, with growth slowing in both the United States and China. The eurozone is projected to continue its recovery, and emerging markets are expected to maintain their resilience.

Defaults are likely to remain contained, though they may exceed long-term averages. S&P predicts that the U.S. trailing-12-month speculative-grade corporate default rate will decrease to 4% by September 2026, down from current levels. In Europe, the rate is expected to fall from 3.7% to 3.25%. These trends are attributed to healthy corporate earnings and manageable impacts from U.S. tariffs, alongside an anticipated continued decline in policy interest rates.

Investment in artificial intelligence (AI) is increasingly driving market valuations and investment volumes, resulting in a surge in data center construction. This growth could contribute to overall economic expansion. Nevertheless, S&P warns that such investments might lead to overinvestment, potentially straining credit conditions in the future.

Geopolitical uncertainties continue to cast a shadow over the global economic landscape. The relationship between the United States and China remains a balancing act, with trade negotiations ongoing while other issues, such as the tech race, simmer below the surface. Global trade tensions have eased somewhat with new agreements, but these deals often lack detail and could prove fragile.

Persistent uncertainties in trade and geopolitical developments could undermine earnings and GDP growth.

The ongoing conflicts in Russia–Ukraine and in the Middle East highlight the fragility of security and political stability, creating risks in a fragmented geopolitical environment.

Market volatility could limit access to capital, especially for weaker issuers, while structural geopolitical tensions may threaten supply chains and commodities markets. As the world enters 2026, it remains crucial for investors to navigate these complexities while remaining aware of the potential impacts on global credit conditions.

For more detailed insights and data, reports are available to RatingsDirect subscribers at www.capitaliq.com. Non-subscribers can purchase copies by contacting S&P Global Ratings directly.