Morningstar DBRS has a neutral outlook for the sovereign debt rating, with “negative trends” in some and none with a positive sign, warning of “high risks of recession”, despite “reasonably robust” global growth in 2026.
“Global economic growth is expected to remain reasonably robust in 2026, but trade policies, geopolitical tensions and fiscal imbalances point to risks on the horizon”, says the financial rating agency in a comment released today.
According to DBRS, although fiscal and monetary policies are “positioned to support growth” during 2026, “unresolved fiscal imbalances will ultimately harm the credit ratings” of sovereign debts.
Pointing out “elevated risks on several fronts”, the agency warns that global trade policy “is likely to be a source of continued surprises”, indicating that “trade protectionism emanating from the US may evolve and ultimately stabilize at higher average tariff rates”.
“Although most countries have so far avoided adopting compensatory tariffs, this could also change in the absence of bilateral agreements with the affected countries”, he maintains.
On the other hand, “ongoing armed conflicts and regional tensions could worsen”, while “large budgetary imbalances in several advanced economies could leave less room for these governments to respond to future recessions”.
“Due to these imminent risks, we enter 2026 with a more neutral outlook”, says Morningstar DBRS, which on Monday had three sovereign credit ratings with negative trends and none with positive trends, compared to six with positive trends and only one with a negative trend at the same time last year.
In this context, the agency considers it “unlikely” that this year’s scenario will be repeated in 2026, in which increases in sovereign credit ratings exceeded decreases.
“However – note –, of our 45 public sovereign credit ratings, 42 have stable trends, which implies that we expect more than 90% of our sovereign credit ratings to remain unchanged over the next 12 months”.