S&P Global expects an increase in global default rates
S&P Global has issued a warning for financial markets, projecting that the global corporate default rate will rise to 3.7 percent by September 2026.
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In a newly published report, international credit rating agency S&P Global Ratings has projected that speculative-grade corporate default rates worldwide will increase over the coming year. According to S&P Global, the default rate, which is expected to be recorded at 3.5 percent in September 2025, is forecast to reach 3.7 percent by September 2026. This increase will be balanced by a rise in the Asia-Pacific region and slight declines in the US and Europe.
The report stated that default rates in developed economies are expected to remain near long-term averages and that improvements have been observed in certain market indicators. However, it was emphasized that risks persist under current conditions, particularly outside of the Asia-Pacific region.
It was noted that the proportion of issuers with a 'CCC' or 'C' rating remains high in the US and Europe, which has allowed default rates to decline to moderate levels in the near term. However, it was underscored that it is too early to speak of a full recovery in these regions.
A notable development is occurring in the Asia-Pacific region. No corporate defaults have been seen in the region since August 2023. Among the reasons cited for this is that the ratings of a significant portion of issuers with 'B-' or lower ratings have been withdrawn. It is stated that the ratings of 54 percent of issuers in this category have been removed over the last 12 months. It was noted that if the current trend continues, the region's default rate could fall below expectations.
Nick Kraemer, an expert at S&P Global Ratings, also pointed to risks regarding the forecasts. Kraemer said, "Downside risks to the forecast include the possibility of a resurgence in trade disputes, which could lead to a pullback in investments and an increase in global market volatility."
Furthermore, Kraemer stated that the rapid growth in artificial intelligence investments in the US and the impact of these investments on the economy and the stock market should be monitored carefully, adding that "a market correction could occur, especially if these investments do not provide the expected returns."