Scope Ratings expects U.S. government debt to climb to about 160% of GDP within a decade, even as it kept the country's credit rating at AA- with a stable outlook. The firm says growing debt leaves the U.S. more exposed to shifts in investor sentiment, and flags the looming debt-ceiling standoff in Congress as an added risk.
Scope holds the rating but warns on the trajectory
Scope Ratings kept the United States at AA- with a stable outlook on Friday, but the European ratings firm paired that call with a warning on the country's finances. Large budget deficits are pushing government debt higher, and Scope said this leaves the U.S. more exposed to shifts in investor sentiment, particularly as rising interest expenses add to fiscal pressure.
The firm expects U.S. government debt to climb to about 160% of GDP within the next decade. It also expects net interest costs to reach an "exceptionally high" level by 2031.
Without growth or fiscal adjustment, dynamics stay unfavorable
Scope said the current fiscal trajectory remains unsustainable over the medium term unless growth accelerates or lawmakers make substantial adjustments to revenue or spending. According to Investing.com: absent materially stronger economic growth or substantial fiscal adjustment, "Scope expects debt dynamics to remain unfavorable".
The firm also flagged risks tied to the approaching congressional standoff over the debt ceiling.
Scope sits below its larger rivals
Scope's AA- grade places the U.S. three levels below the highest possible rating, and the firm last downgraded the country during the 2025 debt-ceiling impasse. Scope now rates the U.S. two levels below Moody's Ratings, Fitch Ratings and S&P Global Ratings, after Moody's downgraded the country last year, stripping it of a top rating from any major agency.
Analysts at the firm have been more cautious than larger competitors. Fitch's chief sovereign analyst said in January that another U.S. downgrade so soon after its 2023 action would be highly unusual. Scope is one of five agencies the European Central Bank uses to assess collateral, and the only Europe-based firm among them.
Source: Investing.com
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