Moody’s: “The financial power of the US is increasingly weakening, and the debt burden is raising alarms.”

Moody’s, the international credit rating agency, predicts that the financial strength of the United States will continue to weaken in the coming years. In a new report released on Tuesday, it highlighted that increasing budget deficits and rapidly rising borrowing costs are putting serious pressure on the country's financial health. Moody’s noted that financial indicators have worsened further since it changed the outlook for the U.S. credit rating to “negative” in November 2023.

According to the report's forecasts, the U.S. debt-to-GDP ratio is expected to reach nearly 100% by 2025, potentially climbing to 130% by 2035. The rapid increase in borrowing costs may also lead to interest payments rising from 9% of budget revenues in 2021 to as high as 30% by 2035. Despite being the world’s largest economy, the U.S. continues to face significant challenges in budget discipline, with Moody’s being the only major agency still granting the country an “AAA” rating.