Global credit conditions in 2020 will weaken due to growing risks of an economic downturn, trade policy uncertainty and the effects of an unpredictable political and geopolitical environment, Moody’s Investors Service said.
Although Moody’s does not expect a recession in 2020 the risk is building, the report said.
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The global economy has witnessed the lowest global growth in 2019 ever since the 2009 recession.
Risks will be centered around US-China trade disputes, Brexit-related uncertainty and the escalation of other bilateral disputes.
Other risks to the global economy relate to debt issuers with weak credit quality accessing the credit markets.
“Recession risks will remain elevated in Europe and the US, while in China domestic rebalancing will continue to create challenges in maintaining the country’s rapid growth,” Moody’s noted.
Moody’s expects interest rates to remain low and yield curves to remain flat for several years going forward, with mixed credit effects by sector.