America's “exceptionally large” budget deficits and inexorably rising debt risks making it increasingly vulnerable to fickle investors, Scope Ratings warned.
In a statement on Friday, the company kept the US at AA-, three steps down from the maximum, with a stable outlook, while adding that the country's path of piling on borrowings can't last forever.
“Absent materially stronger economic growth or substantial fiscal adjustment through either higher revenues or spending reductions, Scope expects debt dynamics to remain unfavorable,” the company said. “This trajectory points to an unsustainable medium-term fiscal path and leaves the sovereign increasingly exposed to shifts in market sentiment.”
The company predicts debt as a percentage of output will rise to 160% within a decade, and highlighted that net interest costs will reach an “exceptionally high” level by 2031. It also pointed to risks associated with the impending Congressional standoff over the debt ceiling.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
While the US no longer has a top credit score from a major assessor following a cut last year by Moody's Ratings, Scope's view has long stood out as particularly downbeat.
Its readiness to downgrade America contrasts with a more conservative approach by rivals. The chief sovereign analyst at Fitch Ratings, for example, said in January that another downgrade of the country so soon after the company cut the US in 2023 would be very unusual.
Scope last lowered America during the 2025 debt ceiling impasse, and scores the country two steps below Moody's, Fitch and S&P Global Ratings.
It is one of only five companies used by the European Central Bank to assess collateral, and the only one of those based in Europe.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
