Outlook remains stable on U.S. AAA rating: Moody's
The outlook on the United States' coveted AAA credit rating remains stable, though the government's financial strength is weakening due to its support for the financial system, Moody's Investors Service said on Tuesday.
Structural fundamentals, political stability and favorable economic prospects are supporting the stable outlook, despite rising debt ratios, Moody's said.
The United States' finances have been substantially worsened by the credit crisis, recession, and government spending to address these shocks, Moody's said.
The ratios of general government debt to gross domestic product and to revenue are deteriorating sharply, and after the crisis they are likely to be higher than the ratios of other Aaa-rated countries, the agency said.
The ratio of debt to revenue has more than doubled over the past three years, reaching well over 400 percent and indicating potential stress on government finances in the future, Moody's said.
The United States, however, is still the world's largest economy, the center of global trade and finance and supported by flexible markets and open trade, Moody's said.
The rating could come under pressure if the upward trend in debt ratios and interest costs continues and measures to stabilize them are not taken, Moody's said.
(Reporting by Dena Aubin; Editing by Leslie Adler)
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