WASHINGTON, D.C.: Fitch Ratings affirmed the United States’ top-flight debt rating on Tuesday (Wednesday in Manila), saying the world’s largest economy remains strong and supported by having the leading reserve currency.
The country’s 2.4 percent growth rate last year, depressed by the deep contraction in the oil industry, still topped most other advanced economies, Fitch noted.
Although US debt has been rising, “it remains well within the tolerance of the ‘AAA’ rating,” it said.
“The economy is one of the most productive, dynamic and technologically advanced in the world, underpinned by strong institutions and a favorable business climate.”
Fitch projected that without any policy changes the US debt burden will continue to creep
higher, from 101 percent of gross domestic product in 2016 to more than 107 percent over the coming decade.
It also warned that the political fighting over budgets, which drove the country close to defaulting on its debt several times over the past five years, could easily return.
In November’s elections, “neither party is likely to win full control of both houses of Congress and the presidency, making progress on fiscal issues dependent on bipartisan cooperation,” it said.
Longer term, the looming issue is the rising burden of social security to the government budget.
“The main social security trust fund is projected by its trustees to run dry in 2029 as payments outpace contributions,” Fitch said.