The euro area's economic recovery will continue in 2018 and become increasingly broad-based. However, governments progress with reforms to address long-standing structural issues and tackle elevated debt levels remains patchy.

Robust economic growth in the Asia-Pacific region will amplify the credit benefits of past reforms and drive further productivity-enhancing reforms.

While the economic recovery across Latin America is set to continue in 2018, debt levels will remain high given subdued government revenues and rigid public spending levels.

Asset underwriting and transaction structures will generally maintain their post-crisis strengths amid signs of weakening and, combined with continued economic growth and stable financial systems, will bolster credit performance.

Outlooks for every transportation infrastructure and project finance sector are stable or positive in all rated global markets, reflecting continued economic growth, supportive regulatory environments and healthy operating performance.

With the exception of US unregulated power, the outlook for the global utilities sector is stable for 2018, reflecting healthy debt service coverage ratios, supportive regulatory environments, and low power prices.

Steady growth in most European economies will support banks’ financial fundamentals, though low interest rates will constrain profitability improvements and some banks still hold large stocks of bad loans.

The outlook change reflects the industry’s success in adapting to product, cost and technology challenges, as well as rising demand in an expanding economy.

Continuing US economic expansion will offer support for consumer asset-backed securities. However, collateral performance in some sectors is likely to weaken due to financial strains on certain borrowers and looser underwriting.

Solvency metrics will be stable in most of the region’s banking systems, owing to a more synchronized economic recovery. Funding and liquidity will remain strong, and most governments are supportive of banks.

Currently 74% of Moody’s-rated sovereigns have a stable rating outlook, reflecting a benign sovereign credit environment, with broad-based and sustained global growth of slightly over 3% of GDP likely in 2018.

Global credit conditions will improve in 2018 as economic growth picks up, despite a buildup of financial stability and political risks. Longer-term credit challenges include new technologies, population aging and climate change.