S&P Affirms U.S. ‘AA+/A-1+’ Sovereign Ratings; Outlook Remains Stable

U.S. Debt and Deficit Outlook

S&P expects the U.S. net general government debt to approach 100% of GDP. This is due to structurally rising non-discretionary interest payments and increasing costs related to an aging population. While fiscal deficits are expected to remain high, they are not projected to worsen significantly over the next few years.

Economic Growth Forecast

The U.S. economy is projected to grow at around 2% annually. However, following a slowdown in 2025 and 2026, average annual real GDP growth is expected to decelerate to 1.7% in 2025 and 1.6% in 2026. This indicates moderate growth but continued resilience in the economy.

Key Takeaways

• S&P reaffirms U.S. sovereign ratings at AA+/A-1+ with stable outlook.
• Government debt may approach 100% of GDP due to structural spending pressures.
• Fiscal deficits are expected to remain high but not deteriorate further.
• U.S. economic growth is forecasted to slow slightly in 2025 and 2026.
• Long-term challenges include rising interest costs and aging-related expenditures.

Conclusion

The reaffirmation of the U.S. credit rating by S&P reflects confidence in the country’s economic fundamentals and institutional strength. Despite ongoing fiscal pressures, including high deficits and rising debt, the outlook remains stable, signaling that the U.S. economy can manage its financial challenges while maintaining steady growth.