Moody’s predicts collapse for US financial power

Baku. 14 December. REPORT.AZ/ Tax cuts and a slowing economy will undermine the financial power of the United States in the next decade, said Moody’s Investor Service in a new report, Report informs citing Yahoo! Finance portal.

According to the report, the US economy grew by 4.2% in the second quarter of fiscal year 2018, which is the highest level since 2014. However, in 2018 and 2019 fiscal years, the Agency predicts economic growth of only 2.9% and then is forecast to fall to 0.9%.

The Federal budget deficit the U.S. has grown from 3.5% of GDP in 2017 to 3.8% (779 billion) in 2018, says Moody’s. The Agency predicts the deficit to 4.8% of GDP (one trillion dollars) in the current financial year and the overall increase to 8% by 2028.

However, due to reduction in corporate tax rate from 35% to 20%, tax revenues from businesses in the 2018 financial year fell by 31%, the report said.