The US government faces a debt ceiling deadline on 1 March, the sixth since 2013, Scope Ratings agency reports, noting that “The Treasury technically will no longer have the permission to borrow money to finance the country’s widening deficit when the latest suspension of the statutory “debt ceiling” expires. The debt ceiling was suspended temporarily through 1 March 2019 under the Bipartisan Budget Act of 2018. Total Federal debt currently stands at $22 tln, far above the previous statutory limit of $20.5 tln.”
General government gross debt is expected to increase from around 106% of GDP in 2018 to close to 120% by 2023. Among advanced economies, the US and Italy are the only countries whose debt-to-GDP ratios are projected to meaningfully increase over the coming years while those of comparable economies with high ratings – Germany, UK, France – are expected to remain stable or decline further.
“In addition to deteriorating public finances, we see a likely return to more modest growth rates near or below 2% a year starting in 2019, alongside unresolved international trade disputes, a divided Congress and polarized politics underlined by the recent 35-day government shutdown and President Donald Trump’s declaration of a national emergency to pay for the border wall, as significant credit-relevant challenges,” Alvise Lennkh, analyst at Scope, says.