Global credit conditions are expected to weaken in 2027 as higher financing costs, persistent economic uncertainty and geopolitical risks weigh on borrowers and lenders The rating agency has flagged rising borrowing costs as a key challenge for businesses, governments and households, with tighter financial conditions likely to increase debt-servicing pressures and constrain access to credit
Moody’s Ratings’ 2027 Global Credit Conditions Outlook report examines the key forces that could shape credit markets in the year ahead.
AI investment will remain massive, but investors will increasingly focus on whether revenues and productivity gains justify the scale of spending. Business model disruption will become more visible: some companies will gain from stronger demand and productivity, while others face more competition and weaker pricing power,” Moody’s Ratings said.
Besides, Moody’s expects government intervention through tariffs, regulation,
Besides, Moody’s expects government intervention through tariffs, regulation, export controls and strategic investment to play a growing role in credit outcomes.
The outlook points to a more challenging environment for borrowers as elevated interest rates and refinancing costs make it harder to manage existing debt and raise fresh funds.
Companies with high leverage and weaker cash flows could face greater pressure, while governments may have less fiscal room as debt-servicing expenses rise.
As many of these tools can be introduced
“As many of these tools can be introduced or reversed by executive action, policy can shift quickly, therefore this will continue to influence trade, capital allocation and competition in 2027,” it said.
“Moody’s Ratings expects global credit conditions to weaken in 2027 as higher financing costs and elevated energy prices create pockets of pressure, even as major economies continue to expand,” the agency said.
Rising spending on energy security, critical minerals, defence, and climate resilience will create opportunities for some sectors while increasing costs for others. Higher refinancing costs will put greater pressure on highly leveraged issuers and borrowers with significant near-term maturities.
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Vikas Kumar is Deputy Editor (Business) at Times Now driving coverage across policy, economy and markets. He possesses nearly a decade of experience i… View More
