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Fitch devalued US long-term credit rating to AA+ from AAA
Posted on August 4, 2023 |
The American credit rating agency, Fitch Ratings devalued the US' long-term foreign currency issuer default rating to AA+ from AAA due to fiscal damage, growing government debt burden, and deteriorating governance in the past 2 decades..
In 2023, the general government (GG) deficit is expected to rise to 6.3% of GDP, which was 3.7% in 2022, due to low federal revenues, new spending, and elevated interest burden.
The GG debt-to-GDP ratio is likely to increase over the prediction period, reaching 118.4% by 2025, making the U.S. fiscal position helpless to future economic shocks.
Despite these problems, the large, advanced economy and dollar status are supporting the U.S. ratings, which offer financing flexibility.