S&P affirms US' credit ratings with stable outlook

By Ovunc Kutlu

ISTANBUL (AA) - S&P Global Ratings said it affirmed the US' 'AA+' long-term and 'A-1+' short-term sovereign credit ratings, and its outlook on the long-term rating remains stable.

The stable outlook reflects the US' institutional checks and balances, strong rule of law, and free flow of information that contribute to stability and predictability in economic policies, the agency said in a statement late Wednesday.

"The resilience of American institutions, its economy, and the size and depth of its financial market sustain the U.S. dollar's status as the world's premier reserve currency and support policy flexibility. Comparatively weak fiscal indicators that continue to constrain the sovereign credit rating offset those strengths," it added.

The rating agency, however, warned that it could lower the rating over the next two to three years if unexpected negative political developments jeopardize the dollar's status as the world's leading reserve currency, and if already-high deficits were to rise.

Rating could be raised if effective public policymaking improves fiscal performance that substantially reduces general government deficits and lowers debt burden.

S&P said it expects US economy to expand 2.5% this year as the American economy avoids a recession and achieves a soft landing -- a situation where a central bank raises interest rates too much and too high, leading to an economic slowdown but avoiding a recession.

American economy is estimated to grow 1.5% in 2025, 1.7% in 2026 and 1.9% in 2027, according to the agency's forecast figures.