Ratings agency Moody’s has upgraded its outlook for the US credit rating, citing a declining budget deficit.
The agency lifted its outlook to stable from negative, as it affirmed the country’s AAA rating.
It said the US economy was growing at a “faster rate compared with several AAA” peers and has demonstrated a “degree of resilience” to major reductions in the growth of government spending.
It added it expected the deficit to shrink further in the next few years.
According to the Congressional Budget Office, the budget deficit for the 2013 financial year is likely to decline to 4% of gross domestic product (GDP), down from 7% in 2012.
Moody’s said the decline was greater than the fall it had anticipated when it cut the outlook on US rating to negative from stable in 2011.
The agency added that growth forecasts for the US economy for the next few years were “close to the long-term average for the decades before the financial crisis”.