1. 標題：
Fitch Downgrades the United States' Long-Term Ratings to 'AA+' from 'AAA';
Outlook Stable
惠譽將美國長期評級從“AAA”下調至“AA+”；展望穩定
2. 來源：惠譽官方網站
3. 網址：https://tinyurl.com/2b9a2hff
4. 內文：
Fitch Downgrades the United States' Long-Term Ratings to 'AA+' from 'AAA';
Outlook Stable
Tue 01 Aug, 2023 - 下午5:13 ET
Fitch Ratings - London - 01 Aug 2023: Fitch Ratings has downgraded the United
States of America's Long-Term Foreign-Currency Issuer Default Rating (IDR) to
'AA+' from 'AAA'. The Rating Watch Negative was removed and a Stable Outlook
assigned. The Country Ceiling has been affirmed at 'AAA'.
A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS
Ratings Downgrade: The rating downgrade of the United States reflects the
expected fiscal deterioration over the next three years, a high and growing
general government debt burden, and the erosion of governance relative to
'AA' and 'AAA' rated peers over the last two decades that has manifested in
repeated debt limit standoffs and last-minute resolutions.
Erosion of Governance: In Fitch's view, there has been a steady deterioration
in standards of governance over the last 20 years, including on fiscal and
debt matters, notwithstanding the June bipartisan agreement to suspend the
debt limit until January 2025. The repeated debt-limit political standoffs
and last-minute resolutions have eroded confidence in fiscal management. In
addition, the government lacks a medium-term fiscal framework, unlike most
peers, and has a complex budgeting process. These factors, along with several
economic shocks as well as tax cuts and new spending initiatives, have
contributed to successive debt increases over the last decade. Additionally,
there has been only limited progress in tackling medium-term challenges
related to rising social security and Medicare costs due to an aging
population.
Rising General Government Deficits: We expect the general government (GG)
deficit to rise to 6.3% of GDP in 2023, from 3.7% in 2022, reflecting
cyclically weaker federal revenues, new spending initiatives and a higher
interest burden. Additionally, state and local governments are expected to
run an overall deficit of 0.6% of GDP this year after running a small surplus
of 0.2% of GDP in 2022. Cuts to non-defense discretionary spending (15% of
total federal spending) as agreed in the Fiscal Responsibility Act offer only
a modest improvement to the medium-term fiscal outlook, with cumulative
savings of USD1.5 trillion (3.9% of GDP) by 2033 according to the
Congressional Budget Office. The near-term impact of the Act is estimated at
USD70 billion (0.3% of GDP) in 2024 and USD112 billion (0.4% of GDP) in 2025.
Fitch does not expect any further substantive fiscal consolidation measures
ahead of the November 2024 elections.
Fitch forecasts a GG deficit of 6.6% of GDP in 2024 and a further widening to
6.9% of GDP in 2025. The larger deficits will be driven by weak 2024 GDP
growth, a higher interest burden and wider state and local government
deficits of 1.2% of GDP in 2024-2025 (in line with the historical 20-year
average). The interest-to-revenue ratio is expected to reach 10% by 2025
(compared to 2.8% for the 'AA' median and 1% for the 'AAA' median) due to the
higher debt level as well as sustained higher interest rates compared with
pre-pandemic levels.
General Government Debt to Rise: Lower deficits and high nominal GDP growth
reduced the debt-to-GDP ratio over the last two years from the pandemic high
of 122.3% in 2020; however, at 112.9% this year it is still well above the
pre-pandemic 2019 level of 100.1%. The GG debt-to-GDP ratio is projected to
rise over the forecast period, reaching 118.4% by 2025. The debt ratio is
over two-and-a-half times higher than the 'AAA' median of 39.3% of GDP and
'AA' median of 44.7% of GDP. Fitch's longer-term projections forecast
additional debt/GDP rises, increasing the vulnerability of the U.S. fiscal
position to future economic shocks.
Medium-term Fiscal Challenges Unaddressed: Over the next decade, higher
interest rates and the rising debt stock will increase the interest service
burden, while an aging population and rising healthcare costs will raise
spending on the elderly absent fiscal policy reforms. The CBO projects that
interest costs will double by 2033 to 3.6% of GDP. The CBO also estimates a
rise in mandatory spending on Medicare and social security by 1.5% of GDP
over the same period. The CBO projects that the Social Security fund will be
depleted by 2033 and the Hospital Insurance Trust Fund (used to pay for
benefits under Medicare Part A) will be depleted by 2035 under current laws,
posing additional challenges for the fiscal trajectory unless timely
corrective measures are implemented. Additionally, the 2017 tax cuts are set
to expire in 2025, but there is likely to be political pressure to make these
permanent as has been the case in the past, resulting in higher deficit
projections.
Exceptional Strengths Support Ratings: Several structural strengths underpin
the United States' ratings. These include its large, advanced,
well-diversified and high-income economy, supported by a dynamic business
environment. Critically, the U.S. dollar is the world's preeminent reserve
currency, which gives the government extraordinary financing flexibility.
Economy to Slip into Recession: Tighter credit conditions, weakening business
investment, and a slowdown in consumption will push the U.S. economy into a
mild recession in 4Q23 and 1Q24, according to Fitch projections. The agency
sees U.S. annual real GDP growth slowing to 1.2% this year from 2.1% in 2022
and overall growth of just 0.5% in 2024. Job vacancies remain higher and the
labor participation rate is still lower (by 1 pp) than pre-pandemic levels,
which could negatively affect medium-term potential growth.
Fed Tightening: The Fed raised interest rates by 25bp in March, May and July
2023. Fitch expects one further hike to 5.5% to 5.75% by September. The
resilience of the economy and the labor market are complicating the Fed's
goal of bringing inflation towards its 2% target. While headline inflation
fell to 3% in June, core PCE inflation, the Fed's key price index, remained
stubbornly high at 4.1% yoy. This will likely preclude cuts in the Federal
Funds Rate until March 2024. Additionally, the Fed is continuing to reduce
its holdings of mortgage backed-securities and U.S. Treasuries, which is
further tightening financial conditions. Since January, these assets on the
Fed balance sheet have fallen by over USD500 billion as of end-July 2023.
ESG - Governance: The U.S. has an ESG Relevance Score (RS) of '5' for
Political Stability and Rights and '5[+]' for the Rule of Law, Institutional
and Regulatory Quality and Control of Corruption. Theses scores reflect the
high weight that the World Bank Governance Indicators (WBGI) have in Fitch's
proprietary Sovereign Rating Model. The U.S. has a high WBGI ranking at 79,
reflecting its well-established rights for participation in the political
process, strong institutional capacity, effective rule of law and a low level
of corruption.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating
Action/Downgrade