Fitch: The U.S. fiscal outlook remains challenging

Fitch said the US fiscal outlook remains challenging in the absence of major spending reforms. According to its baseline forecast, the US general government fiscal deficit will fall to 7.1 per cent of GDP by 2025 from nearly 8 per cent in 2024, Fitch said. However, the total government deficit will rise to 7.6 per cent of GDP by 2026. "We expect the fiscal deficit to remain high in the coming years as we do not anticipate significant additional fiscal policy changes for the remainder of the Trump administration," Fitch said. The agency also said "meaningful mandatory entitlement reform is critical to enhancing the sustainability of public finances over the medium term", adding that the CBO expects rising Social Security and Medicare costs to add 2 per cent to the deficit over the next decade.