Fitch ratings agency revised its outlook on the US' AAA rating to negative as the world’s largest economy's national debt topped $26.5 trillion (Dh97tn) in June and it continues to grapple with the coronavirus health crisis.
Though the country's AAA rating was not changed, the revision in outlook is a reflection of "the ongoing deterioration in the US public finances and the absence of a credible fiscal consolidation plan", the ratings agency said.
The outlook revision of the US is the first major action by an agency since Standard & Poor’s downgrade of the country’s sovereign rating to AA-plus from its triple A status during the global financial crisis in 2011.
Fitch’s action comes as the US continues to battle the highest number of Covid-19 infections in the world and policymakers in Washington argue over the size of a second stimulus package that tops the fiscal stimulus and monetary measures rolled out already.
The number of people in the US infected with Covid-19 rose to more than 4.5 million, equivalent to more than a quarter of all cases globally. As of August 1, the country has more than 153,000 coronavirus-related deaths, according to Johns Hopkins University, which is tracking the pandemic.
Fitch expects the US’ government debt - the highest of any AAA-rated sovereign - to exceed 130 per cent of gross domestic product by 2021.
“Debt to GDP could stabilise temporarily from 2023 if fiscal balances return to pre-pandemic levels, but only assuming that interest rates stay very low,” the agency said.
Health and social security costs are expected to rise over the medium-term, Fitch said.
The US’ rising debt-to-GDP levels follows massive amounts of stimulus injected into the economy. The total of what the US might commit to fight off Covid-19 may exceed $6tn as the government seeks to help businesses and individuals navigate the deepest recession in a century.
US Senate Republicans and Democrats are currently debating the volume of additional stimulus needed to revive the economy. On Thursday government data showed the US economy shrank 32.9 per cent in the second quarter, the worst contraction since the Second World War. Personal spending, which accounts for two-thirds of US GDP slumped an annualised 34.6 per cent in the second quarter, the highest on record.
Republicans, who control the Senate have presented a conservative $1tn plan to boost unemployment benefits and shield businesses from lawsuits stemming from the distress caused by the coronavirus pandemic. Democrats have tabled a $3.5tn plan, which they say is more adequate to cover the needs of American businesses and workers furloughed during the pandemic.
Republicans are opposed to increasing unemployment benefits to Americans laid off during the pandemic. A $600 per week unemployment benefit initiated during the health crisis was allowed to expire Friday night as Republicans and Democrats failed to reach an agreement to extend the programme.
Fitch cautioned there is a "growing risk” that US policymakers will not be able to consolidate public finances sufficiently to stabilise public debt after the pandemic shock has passed.
US unemployment has ballooned during the pandemic, wiping out most of the jobs created since the 2008 financial crisis. The unemployment rate dropped to 11.1 per cent in June, from an all-time high of 14.7 per cent in April as lockdown measures were eased. However jobless claims are set to rise as states impose lockdowns again in the wake of a surge in infections.
While US economic data remained gloomy, US tech stocks performed well, even while other equities remained down.
Apple, whose better-than-expected second quarter earnings saw it regain its position as the world’s most valuable company, led the rally in tech stocks, alongside Facebook and Amazon. Apple, Amazon and Facebook saw their shares rally 6 to 7 per cent in after-hours trading on Friday.
WWE Super ShowDown results
Seth Rollins beat Baron Corbin to retain his WWE Universal title
Finn Balor defeated Andrade to stay WWE Intercontinental Championship
Shane McMahon defeated Roman Reigns
Lars Sullivan won by disqualification against Lucha House Party
Randy Orton beats Triple H
Braun Strowman beats Bobby Lashley
Kofi Kingston wins against Dolph Zigggler to retain the WWE World Heavyweight Championship
Mansoor Al Shehail won the 50-man Battle Royal
The Undertaker beat Goldberg
UAE currency: the story behind the money in your pockets
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Scores
Rajasthan Royals 160-8 (20 ov)
Kolkata Knight Riders 163-3 (18.5 ov)
UAE currency: the story behind the money in your pockets
The specs
Engine: 1.4-litre 4-cylinder turbo
Power: 180hp at 5,500rpm
Torque: 250Nm at 3,00rpm
Transmission: 5-speed sequential auto
Price: From Dh139,995
On sale: now
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Draw:
Group A: Egypt, DR Congo, Uganda, Zimbabwe
Group B: Nigeria, Guinea, Madagascar, Burundi
Group C: Senegal, Algeria, Kenya, Tanzania
Group D: Morocco, Ivory Coast, South Africa, Namibia
Group E: Tunisia, Mali, Mauritania, Angola
Group F: Cameroon, Ghana, Benin, Guinea-Bissau
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Scoreline
Bournemouth 2
Wilson 70', Ibe 74'
Arsenal 1
Bellerin 52'
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai
Third Test
Day 3, stumps
India 443-7 (d) & 54-5 (27 ov)
Australia 151
India lead by 346 runs with 5 wickets remaining
Babumoshai Bandookbaaz
Director: Kushan Nandy
Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami
Three stars
UAE currency: the story behind the money in your pockets
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Killing of Qassem Suleimani
SPECS
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The specs: 2018 Mercedes-Benz GLA
Price, base / as tested Dh150,900 / Dh173,600
Engine 2.0L inline four-cylinder
Transmission Seven-speed automatic
Power 211hp @ 5,500rpm
Torque 350Nm @ 1,200rpm
Fuel economy, combined 6.4L / 100km
