Fitch rating agency has recently confirmed the maximum rating, AAA, for the United States' long-term foreign and local currency Issuer Default Ratings (IDRs) and Fitch-rated US Treasury security ratings. The agency has also affirmed the US country ceiling at 'AAA' and the short-term foreign currency rating at 'F1+'. The outlook on the long-term ratings is stable, the agency has recently announced.

This came soon after Standard & Poor's downgraded the US from AAA to AA+, causing turmoil on international markets.

“The affirmation of the US 'AAA' sovereign rating reflects the fact that the key pillars of US's exceptional creditworthiness remains intact: its pivotal role in the global financial system and the flexible, diversified and wealthy economy that provides its revenue base. Monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to 'shocks',” according to Fitch.

The US economy remains one of the most productive in the world, reflected in levels of income per head that are substantially higher than the 'AAA' median and other major 'AAA' sovereigns, the agency continues in its rating review.

“Despite its exceptional creditworthiness, the fiscal profile of the US government has deteriorated sharply and is set to become an outlier relative to 'AAA' peers. The overall level of general government debt, which includes debt incurred by states and local governments, is estimated by Fitch to reach 94 percent of GDP this year, the highest amongst 'AAA' sovereigns. However, federal government indebtedness is lower than in other major 'AAA'-rated central governments. Fitch estimates that federal debt held by the public will be equivalent to approximately 70 percent of GDP this year compared to around 75 percent for the UK ('AAA') and France ('AAA'),” according to Fitch.

editor@romania-insider.com

(photo source: Sxc.hu)