Fitch affirms US triple-A credit rating

GMT 22:21 2014 Friday ,19 September

Arab Today, arab today Fitch affirms US triple-A credit rating

Firm Fitch
Washington - AFP

Ratings agency Fitch on Friday said the United States still deserves its triple-A credit rating, with its solid financial system able to bear a high level of public debt.
"The economy is large, rich and diverse, with GDP per capita (at purchasing power parity) and levels of human development above the 'AAA' median," Fitch said.
But it also took note of the strong reduction in fiscal deficits over the past five years, bringing the government's shortfall down from 9.8 percent of gross domestic product in fiscal 2009 to 2.9 percent this year.
The high deficit combined with chronic political battles that had hampered government financial planning pushed Standard & Poor's  to cut its US grade from the gold-standard triple-A level by one notch in August 2011, the first time ever that Washington was downgraded by a leading rater.
Fitch Friday warned that despite the gains on the budget gap made by the administration of President Barack Obama, it will likely begin to expand again in 2016, challenging the country's ability to reduce its debt load.
Fitch also noted that the compromise between Republicans and Democrats over the budget and the government's borrowing powers effectively ends in March next year, setting the stage for more turmoil.
"In our view, the coherence of economic policy-making is weaker than in most 'AAA' peers," Fitch said.
On the positive side, Fitch noted that the economic growth in the United States is stronger than most other advanced countries, even if still not particularly fast.
It also said the US dollar's role as the leading global reserve currency continues to function as a powerful backbone for the economy, helping to give the United States the world's deepest and most liquid capital markets.

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