Business EconomyPosted at: Nov 10 2026 6:04PM


Higher interest rates, energy prices to put global borrowers under pressure in 2027: Moody's

New Delhi, Nov 10 (UINI) Moody's Ratings expects global credit conditions to deteriorate in 2027, with higher borrowing costs and elevated energy prices likely to put pressure on businesses, governments and other borrowers. While major economies are expected to continue expanding, the rating agency cautioned that refinancing pressures and changing economic and policy dynamics could create pockets of financial stress.
In its 2027 Global Credit Conditions Outlook report released on Tuesday, Moody's examined the major trends expected to influence global credit markets over the coming year. It highlighted the rising cost of financing, energy price pressures, developments in artificial intelligence (AI) and increasing government intervention as key factors shaping credit conditions.
The agency expects investment in AI to remain substantial in 2027. However, investors are likely to become more selective, increasingly assessing whether the revenues and productivity improvements generated by AI can justify the enormous capital expenditure involved.
Moody's also warned that the disruptive impact of AI on business models could become more pronounced. While some companies may benefit from stronger demand and improved productivity, others could face intensifying competition and declining pricing power, creating differences in credit performance across sectors.
Government intervention is another factor expected to have a growing influence on global credit conditions. Moody's said the use of tariffs, regulatory measures, export restrictions and strategic investments could increasingly determine business competitiveness and investment decisions.
The agency noted that several such policy measures can be introduced or reversed through executive action, making the policy environment unpredictable. Changes in government priorities could consequently affect international trade, capital allocation and competition during 2027.
Meanwhile, increased spending on energy security, critical minerals, defence and climate resilience is expected to create business opportunities for certain industries. However, the resulting investment requirements and higher operating costs could add financial pressure on other sectors.
Moody's flagged rising refinancing costs as another significant risk for global credit markets. Companies and borrowers carrying substantial debt, particularly those facing large repayment obligations in the near term, could encounter greater financial stress as they refinance existing borrowings at higher interest rates.
According to the rating agency, these pressures could weaken credit conditions even as economic activity continues to expand across major economies.
Moody's expects the combination of expensive financing and elevated energy prices to increase credit risks in 2027, with the impact varying across industries, companies and borrowers depending on their financial strength and exposure to changing economic conditions.UNI VK AAB
Tags: #Higher interest rates# energy prices to put global borrowers under pressure in 2027: Moody's
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