"Several governments have been using this easy funding time to actually take their eyes off the ball a little bit on macroeconomic stability issues and focusing more on policies that have a more immediate political payoff domestically," said the rating agency's sovereign global chief ratings officer Moritz Kraemer, referring to the loose monetary policies of global central banks.
That domestic political risk is present in several developing countries, which have not taken the opportunity to pay down leverage and debt, Kraemer told CNBC on the sidelines of the International Monetary Fund meetings in Washington D.C.
"That's partly explained by the fact that conditions are so benign globally now that you get away with it," Kraemer said. "There's quite a bit of runway left for countries to continue accumulating debt while rates are so low, and that's a concern for us."
However, Portugal is one bright spot, Kraemer said, nothing that Lisbon "has used these times to make the adjustment required to make their position more sustainable." As a result, S&P raised Portugal's credit rating back to investment grade after five and a half years.
Emerging markets are expected to face more pressure as the Federal Reserve and the European Central Bank gradually turn off the taps of easy money. The U.S. central bank has signaled its commitment to monetary tightening while the ECB began discussions on tapering last month.
"The wall of liquidity that's been going to emerging markets may be somewhat less benevolent to them ... time will tell who's actually exposed to that," said Kraemer.