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.