'Global credit conditions to weaken next year'

Agencies New Delhi: Moody's Ratings said on Tuesday that it expects global credit conditions to weaken in 2027 as higher financing costs and elevated energy prices create pockets of pressure, though major economies will continue to expand. The US-based credit rating agency said in a report that costlier credit, artificial intelligence (AI)-led transformation, political intervention and security premiums will drive credit risks and opportunities across sectors and regions. "Government intervention through tariffs, regulation, export controls and strategic investment will play a growing role in credit outcomes," it said, adding that these will continue to influence trade, capital allocation and competition in 2027. According to the report, higher refinancing costs will put greater pressure on highly leveraged issuers and borrowers with significant near-term maturities. "However, banks and life insurers are the exception, as higher rates support their earnings," it said. Also Read | Economists raise concerns as India's growth increasingly becomes credit expansion-led The report further said that rising spending on energy security, critical minerals, defence and climate resilience will create opportunities for some sectors while increasing costs for others. Commenting on investments in AI, the report said AI investment will remain massive, but investors will increasingly focus on whether revenues and productivity gains justify the scale of spending. Live Events "Business model disruption will become more visible with some companies gaining from stronger demand and productivity, while others facing more competition and weaker pricing power," it said. Moody's Ratings said that the expansion of AI infrastructure beyond the US is supporting investment and growth in parts of Asia-Pacific , although benefits will be uneven. "The region is also central to global semiconductor and critical-mineral supply chains, making technology restrictions, export controls and supply-chain security increasingly important credit considerations," it added. Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel ) Read More News on moody s ratings Credit Conditions rating agency energy prices financing costs (You can now subscribe to our Economic Times WhatsApp channel ) Read More News on moody s ratings Credit Conditions rating agency energy prices financing costs Explore More Stories Sass Jordan cause of death: How did ‘Racine’ singer die after cancelling shows over ‘serious medical condition’? Canadian rock singer Sass Jordan, voice behind ‘Make You a Believer’ and ‘Tell Somebody,’ dies at 63 Helicopter crash on Montreal’s South Shore leaves 4 dead; Transport Minister expresses condolences as probe begins Nova Scotia teacher charged with sexually assaulting student at school as police identify more victims Nova Scotia Crime: Teacher faces multiple serious charges, prohibited from public places after alleged assaults at Riverton school Psychology explains why people who dislike being interrupted may be protecting more than just their train of thought Powerball jackpot climbs to $313 million for September 21 drawing - Here's what Monday night's winner could take home Quote of the Day by Malala Yousafzai: ‘One child, one teacher, one book, one pen can…’ - How one person can spark global change with the simplest tools Quote of the Day by Thomas Mann: ‘Whoever loves the more is at a disadvantage and must suffer’ - Nobel-winning novelist on why the person who care more may have more to lose Quote of the Day by Anton Chekhov: ‘Every happy man should have someone with a little hammer at his door to knock and remind him that there are unhappy people, and…’ Gary Myers death: NASCAR legend dies at 76; sons mourn ‘hero’ who shaped four generations of racing Quote of the day by Rita Wilson: ‘Be fearless in trying new things, whether they are physical, mental…’ – Sleepless in Seattle actress on turning fear into growth Manager keeps booking 4:45 PM Friday meetings despite team logging off at 5, employee calls it a ‘Friday ambush’ and asks if it’s a power move 1 2 3