WASHINGTON – S&P Global Ratings yesterday affirmed the grade on US government debt at AA+ and said it expects a rapid recovery of the pandemic-damaged economy.
With “unprecedented fiscal and monetary stimulus” – including a massive US$1.9 trillion (RM7.8 trillion) package approved last week – S&P said it expects “rapid economic growth this year and next as the pandemic recedes”.
S&P said the outlook on US debt is stable as negative and positive factors are expected to be “balanced over the next three years”.
However, the agency cautioned that “ratings are constrained by high general government debt and fiscal deficits, both of which worsened in 2020 following the economic shock caused by the pandemic”.
The US will see its second-largest budget deficit since World War II this year, climbing to US$3.1 trillion, according to a recent Congressional Budget Office (CBO) estimate.
S&P highlighted the quick US policy response to the economic challenges and the “bipartisan coordination between the executive branch and Congress despite intense political disputes during national elections”. – AFP, March 17, 2021
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