United States of America downgraded to AA- by Scope Ratings

German-based credit rating agency Scope Ratings on Friday lowered the sovereign credit rating of the United States from AA to AA-, citing a continued deterioration in public finances and a decline in governance quality.

According to the agency’s report, the downgrade reflects persistently large federal deficits, an increasing burden of net interest payments, and signs of weakening institutional standards. Scope noted that the U.S. government deficit widened to 8.0% of GDP in 2024, significantly above the pre-pandemic average of around 4.8% recorded between 2015 and 2019. The enactment of the One Big Beautiful Bill Act (OBBBA) has further undermined the fiscal outlook.

Scope projects that the deficit will remain elevated at 7.4% of GDP in 2025, averaging roughly 7.8% between 2026 and 2030, compared with 7% at the time of its previous review in May 2025. In the absence of substantial fiscal adjustments, the agency expects the U.S. government debt ratio to rise to 140% of GDP by 2030, up from 122% in 2024.

The report warns that limited budgetary flexibility—further constrained by the fiscal commitments introduced under the OBBBA—reduces the administration’s ability to implement sufficient expenditure cuts or revenue measures needed to stabilize debt dynamics in the medium term.

In addition, Scope cited a decline in governance standards as a factor diminishing the predictability of U.S. policymaking. This trend, the agency said, heightens the risk of policy errors and undermines Congress’s capacity to address the country’s structural fiscal challenges.