Assessing Global Macro-Credit Risks

As an assessment of the external operating environment, our regional and global Credit Conditions Committee forums—covering Asia-Pacific, Emerging Markets, Europe, and North America, which cascade into our global coverage—form an integral part of S&P Global Ratings’ credit rating analysis.

At the CCCs, our senior researchers, economists, and analysts (covering corporates, financial institutions, insurance, structured finance, sovereigns, and U.S. public finance) meet each quarter to evaluate the trends affecting the current and future states of economies, industries, and credit markets. The CCCs identify base case and downside scenarios, and rank exogenous risks. These views are cascaded to our analytical teams to inform their rating deliberations.

Our quarterly and special CCC reports crystallize the Committees’ conclusions, backed by a host of proprietary data, and with an eye toward helping investors make decisions—providing financial market participants around the world with a primary resource for identifying and understanding prevailing and potential credit risks.

Assessing_Global_Macro_Credit_Risks

Webinar Replay: Global Credit Conditions: Americas/EMEA

S&P Global Ratings’ leading researchers, economists, and analysts explored our latest Q4 2024 global credit conditions research. Our subject matter experts evaluated the trends affecting the current and future states of economies, industries, and credit markets; shared our base case and downside macro-economic forecasts; and identified emerging risks.

Global

Global Credit Conditions Q3 2025: Bending, Not Breaking

The partial pause on tariffs has offered some reprieve to credit conditions, which have also proven resilient amid evolving geopolitical conflicts. This pause will soon come to an end, and tariffs--wherever they ultimately land--will likely remain substantially higher than at the start of the year and weigh on economic growth. Also, global alliances and multinational institutions are being upended. The longterm geopolitical changes at play will likely lead to material shifts in capital flows between regions, sectors, and asset classes.  

Rating actions--including outlook revisions or CreditWatch placements--that have occurred because of tariffs have remained contained since the partial pause. And under our base case, defaults will likely stay flat or decline modestly in the next 12 months. That said, we believe ratings are at an inflection point, with the number of downgrades exceeding upgrades slightly this quarter.

Credit market volatility has subsided substantially with the partial pause on tariffs, and the volatility in commodity prices remained measured so far amid the Israel-Iran conflict. But there is no permanent resolution in sight for trade and geopolitical conflicts. Consumer and market confidence could easily be hurt again, at a time when many governments’ fiscal leeway is more constrained than ever. 

Webinar Replay: Global Credit Conditions: APAC

S&P Global Ratings analysts and economists covered our updated macroeconomic forecasts, key risks to credit conditions, and credit trends at the industry level for Asia-Pacific in a live webinar.

North America

Credit Conditions North America Q3 2025: Still More Clouds Than Clarity

Tariff-related concerns continue to cloud the outlook for North American credit conditions, with the reconciliation bill working its way through Congress adding to uncertainty. U.S. involvement in the Israel-Iran conflict—and the fragility of a ceasefire— heightens the risk that tensions will escalate and disrupt the capital and global energy markets, and economic activity.

The volatility that swept through financial markets in the first months of the Trump administration could return amid heightened geopolitical strife, the approaching end of U.S. tariff pauses, and the fate of the tax and spending bill.

For now, spreads on corporate debt remain narrow—well off the highs reached in the aftermath of the White House’s April 2 announced tariffs.

Q3 CCC_US

Europe

Credit Conditions Europe Q3 2025: Credit Rides The Storms

Overall: Facing growing unilateralism and a more geopolitically fractured world feels a toxic brew, especially in Europe. However, with so much in flux on global trade and security the default for governments, businesses, and households has been to hunker down and deal with the day-to-day reality. This has paid dividends as European economic and business performance--and to a lesser extent financial market performance--has proved resilient (so far) to the U.S. trade turmoil and wars in Europe and the Middle East.

Risks: The lack of clarity on how and when trade negotiations with the U.S. will be resolved has implications for growth, supply chains, and corporate financial performance and remains a high risk. Beyond that, several other risks to economic growth persist, including geopolitical tensions (remaining high in the Middle East) that could disrupt the oil market, and uncertainties around the implementation of fiscal plans in Europe.

Ratings: Banks retain a stable outlook based on solid capitalization and good profitability. Within nonfinancial corporates, diverging credit quality performance between investment-grade and speculative-grade issuers is evident, with the greatest vulnerability noted within speculative-grade, tariff-targeted, and energy-intensive sectors.

Q3 CCC Europe graph

Asia-Pacific

Credit Conditions Asia-Pacific Q3 2025: An Unsettling Environment

Unsettling conditions: Turbulence around the Middle East situation is complicating the geopolitical landscape. Key transmission channels include higher oil prices and a weaker macro-outlook. These, and an investor flight to quality, could undo benign credit conditions in Asia-Pacific. Despite significant tariff uncertainty, negative rating actions have been limited due to credit resilience of rated issuers and continuing financing access. However, uncertainty lurks underneath.

U.S.-China détente continues: Tariffs will hurt Asia-Pacific growth prospects. Higher export costs will eat into margins, and weaker sentiment will limit spending by businesses and households. Nonetheless, following the pause in China-U.S. tariffs, we have reverted.

Expanding concentric circles of tensions: The volatile Middle East situation and protracted Russia-Ukraine conflict could renew financial market and currency swings. Shifting U.S. policy and rhetoric on trade and foreign affairs may foreshadow long-term changes in the geopolitical landscape. We see the geopolitical risk trend as worsening.

Deepening cracks: The confluence of credit headwinds will test credit fundamentals across borrowers, distinguishing winners from losers. In addition, the complications of unprecedented geopolitical conditions and an evolving operating landscape (from climate change and technological advancements) could push some to crack under pressure.

Q3 CCC_APAC Graph

Emerging Markets

Credit Conditions Emerging Markets Q3 2025: Weak Dollar Cushions Turbulence

Credit conditions holding up: Credit conditions in emerging markets (EMs) have held up better than expected over the last quarter, despite uncertainty about trade policy and its impact on global growth. This is due to tariffs having a smaller impact on growth than many feared and a weaker dollar, which is attracting capital flows to EMs.

Indirect effects of tariffs: In our baseline, we expect credit conditions in EMs to continue to face significant headwinds, especially as the indirect effects of tariffs, namely slower investment and global growth, become more evident.

Significant downside risks: Along with uncertainty about U.S. trade policy, downside risks to our outlook include the implications of a further escalation of the conflict in Iran, rising long-term government yields, and fiscal challenges across several EMs.

Q3 CCC Emerging Markets graph

Credit Cycle Indicator

Q3 2025: Global Uncertainties Could Stall The Credit Upturn

Our global Credit Cycle Indicator is signaling a delicate credit recovery that could stall amid trade tensions and geopolitical risk.
 
Household sentiment remains strained, while corporates are still benefiting from relatively supportive financing amid uncertain operating conditions and volatile financial markets.
 
Credit trajectories continue to diverge across geographies.

 

Economic Research

Our economists are responsible for developing the macroeconomic forecasts and risk scenarios used by S&P Global Ratings' analysts during the ratings process, as well as leading key cross-sector and cross-divisional research projects.

Latest Research

Take a look at all of our latest credit conditions research.​