Credit ratings agency Fitch has maintained its AA+ long-term foreign currency sovereign credit rating for the United States. Despite projecting that the United States economy would grow at a shrinking rate in 2024, Fitch has maintained a “stable” outlook for the economy, which has remained resilient amid steep interest rates.
Fitch has highlighted a large general government (GG) deficit in 2023, accounting for 8.8% of GDP in 2023, which the credit agency expects to fall to 8% in 2024 due to rising revenue growth and slashed government spending. “The interest burden, however, will continue to grow given the higher debt burden and impact of higher rates”, Fitch explained, suggesting that a declining GG deficit will not prove to be the entire solution to stunted economic growth.
Looking forward, the credit agency views the upcoming US presidential elections in November as a vital driver of the country’s economic trajectory given potential changes in policymaking.