“The global and European economies have been resilient in recent years even accounting for the modest global slowdown of 2025. But risks for the recovery are rising, underscoring a negative medium-run global macro and credit outlook.”, — write: www.fxempire.com
US Policy Shifts Pose Global Risks Recent US policy has had significant effects on the global economy. Pro-cyclical tax cuts, rate reductions and deregulation may present near-term support for the US and global economy, but at the cost of raising longer-run economic imbalances.
The unwinding of post-war alliances and the war in Ukraine have prompted greater European defense expenditure and increased associated risks for sovereign debt sustainability while amplifying the chance of greater geopolitical fragility. The US decisions to halt foreign aid and review its participation in international financial institutions have raised concerns for developing economies. A reversal of climate commitments exacerbates natural-disaster risks for vulnerable countries.
Elevated borrowing rates and financial deregulation undermine longer-run financial resilience. Scope sees higher steady-state borrowing rates lasting for longer. This is although many central banks continue easing policy, while institutions such as the ECB are on hold and the Bank of Japan is gradually tightening. Sustained higher borrowing rates interact adversely with elevated market valuations and financial deregulation.
Sector Outlooks across the rating franchises entering 2026 range from negative for the sovereign asset class, to balanced for financial institutions, to modestly positive for sub-sectors of structured finance.
Webinar: Register here to engage with Dennis Shen, Chair of Scope Ratings’ Macroeconomic Council, on Thursday, 15 January 2026 (3 pm CET) as he outlines the principal factors behind the agency’s outlook of growing risks facing the resilient global economy.
Reports: Scope’s Global Economic Outlook 2026
Slides: 2026 economic and credit outlook
Data: The agency’s December-2025 economic projections
For a look at all of today’s economic events, check out our economic calendar.
Dennis Y. Shen is the Chair of the Macroeconomic Council and Lead Global Economist of Scope Group. The rating agency’s Macroeconomic Council brings together the company’s credit opinions from multiple issuer classes: sovereign and public sector, financial institutions, corporates, structured finance and project finance.