Enterprise Default Prospects

Levallois-Perre, France, October 15, 2026 / PRNewswire / -- Atradius The latest corporate default forecasts released today indicate that global corporate defaults are expected to increase by 5% in 2026 due to ongoing pressures such as rising input costs, trade tensions, high energy prices, and tighter financing conditions. Subsequently, defaults are expected to decline by 4% in 2027, but initial signs of normalization are not expected until the second half of that year.

Atradius pointed out that the default situations are more persistent than expected at the beginning of the year, therefore the forecast for 2026 has been raised, while the decline for 2027 has been lowered.

"The economic environment remains challenging, with high input costs and trade tensions continuing to weigh on businesses," said Theo Smid, the chief economist of Atradius. "Based on the data we have seen so far and our forecasts for the rest of this year, defaults are expected to continue to rise in 2026. Although we expect conditions to gradually improve in 2027, this is more of the beginning of an adjustment process rather than a true return to normal."

However, the expected decline in defaults is not mainly due to a significant improvement in economic conditions, but rather reflects enterprises' gradual adaptation to a more severe environment.

The latest forecasts are based on the assumption that by early 2027, the most vulnerable companies will have exited the market, while the surviving firms will continue to adjust their cost structures, financing methods, and pricing strategies to adapt to an environment of higher long-term costs. It is this adaptability, rather than a significant improvement in the economic environment, that is expected to drive a decline in defaults.

Regional Changes

Regionally, defaults are expected to decline by 5% in Europe and the Asia-Pacific region, while in North America, a decrease of 3% is anticipated. However, the paths for different markets to return to normal vary:

• In the UK, affected by debts incurred after the pandemic, high credit costs, and weak consumer demand, defaults are expected to remain near record highs.
• Romania is one of the few markets where default expectations are expected to continue to rise, due to ongoing fiscal, political, and inflationary pressures.
• Australia and South Korea are expected to make significant contributions to the improvement in the Asia-Pacific region, with default rates in both countries expected to decline after reaching record highs.
• In the United States, as companies gradually adapt to a high inflation and high interest rate environment, while economic growth remains relatively resilient, defaults are expected to decline.

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