The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London, March 3, 2016. (File Photo: Reuters)
Ratings agency Fitch on Friday cut its outlook on the United States to "negative" from "stable," citing deterioration in the country's public finances and deficits made worse by the coronavirus downturn.
"There is a growing risk that US policymakers will not consolidate public finances sufficiently to stabilize public debt after the pandemic shock has passed," Fitch said in a statement.
For more coronavirus news, visit our dedicated page.
High fiscal deficits and debt that were already rising before the coronavirus crisis have started to erode the traditional credit strengths of the United States, the agency said, while affirming its "AAA" rating.
The US had the highest government debt of any AAA-rated sovereign heading into the coronavirus crisis, the agency said, adding that it expects general government debt to exceed 130 percent of gross domestic product by 2021.
This comes after a Goldman Sachs Group Inc. report said it expected the economy to grow 25 percent in the third quarter having previously predicted 33 percent. That would result in the economy slumping 4.6 percent this year, worse than the 4.2 percent previously seen.
Read more:
Coronavirus lockdown: Can we save lives and protect the economy during COVID-19?
Coronavirus hit US economy harder than great recession, minorities affected worse
