Moody said on Tuesday that the US tax force is on its way to a continuous decrease in the coming years as the budget deficit grows and debt becomes less sustainable.
The agency said in a report that the financial health in the country has deteriorated more since Modi reduced her from her point of view in the American AAA note in November 2023.
The report is established amid increased uncertainty in the American markets, as President Donald Trump’s decision to impose a tariff on the main commercial partners caused the fear of investors in prices and strong economic slowdown.
“Even in a very positive economic and financial scenario (…) the ability to pay the debt is still weaker material than other sovereign countries that have AAA and a high qualifying recommendation.”
MOODY projects will increase that the debts of US GDP, an important rate in evaluating the country’s financial affairs, will increase to about 130 % by 2035, or nearly 100 % by 2025.
The ability to pay the debt will get worse at a faster pace, as interest payments represent 30 % of revenues by 2035, compared to 9 % by 2021, according to the agency.
MOODY’s is the last of the three most important recommendations to maintain a maximum recommendation for American sovereign debt, although it was reduced from its point of view at the end of 2023 due to the larger tax deficit and higher benefits payments.
Fitch reduced the United States’ sovereign classification from AAA to AA+in 2023, pointing to the financial deterioration and repeated negotiations on the roof of debt that threatens the government’s ability to pay its bills.
It was the second recommendation for the main risks to remove its main recommendation from the United States after Standard & Poor’s after the 2011 debt ceiling crisis.
Investors use credit ratings to evaluate the risk profile for companies and governments when they get financing in capital markets. In general, the lower the loan borrower recommendation, the higher your financing costs.
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