S&P Global Forecasts Resilient Credit Conditions for 2026

S&P Global Ratings has issued a report projecting that global credit conditions will remain resilient into 2026, supported by ongoing economic growth and technology investments. The report, titled “Global Credit Outlook 2026: Music Playing, Noise Rising,” indicates that despite a generally positive outlook, performance will vary across sectors and regions.

The analysis highlights that active refinancing in 2025 has extended maturities for many borrowers. Additionally, decreasing policy interest rates and sustained investor appetite have contributed to a favorable credit environment. According to Alexandre Birry, global head of Credit Research and Insights at S&P, “This outlook is not uniform though. Performance across sectors and geographies will diverge, and the evolving geopolitical order may continue to introduce unexpected policy shifts.”

Lower inflation rates and resilient labor markets in developed economies are expected to bolster consumer spending. S&P projects a stable global economic expansion of 3.2% in 2026, even as growth moderates in the U.S. and China. The eurozone is anticipated to continue its recovery, while emerging markets are likely to maintain their robust performance. Although defaults are expected to remain above long-term averages, they will likely remain contained.

In the U.S., healthy corporate earnings and the manageable effects of tariffs are expected to contribute to a decrease in the trailing-12-month speculative-grade corporate default rate to 4% by September 2026, down from current levels. Similarly, the default rate in Europe is forecasted to decline to 3.25% from 3.7%.

As investment in artificial intelligence (AI) surges, driven by the technology’s perceived transformative potential, there is a risk of overinvestment that could later impact credit conditions. The surge in data center construction and related economic activities may lead to market volatility. Additionally, ongoing uncertainties surrounding U.S. policies and trade relations could negatively affect earnings and GDP growth.

While global trade tensions have eased somewhat with new agreements, these deals often lack substantive details, creating an environment of uncertainty that may dampen investment and consumption. Prolonged market volatility could restrict access to capital, particularly for weaker issuers. Furthermore, geopolitical tensions, including the ongoing conflicts in Russia-Ukraine and the Middle East, underscore the fragility of political stability and supply chains.

The relationship between the U.S. and China remains delicate, with current negotiations focused on trade while broader issues, such as competition in technology, continue to simmer. The potential for negative surprises related to trade or geopolitical events could challenge market resilience.

For more detailed analyses and insights, reports are available to RatingsDirect subscribers at www.capitaliq.com. Non-subscribers can obtain copies by contacting [email protected] Public ratings information can also be accessed via the ratings search box at www.spglobal.com/ratings.

Media inquiries can be directed to Jeff Sexton at S&P Global Ratings in New York, reachable at +1-212-438-3448 or via email at [email protected]