In the statement regarding the “North America Cross-Sector Outlook 2024” report from the international credit rating agency Fitch, it was stated that sharply slowing economic growth, high unemployment and ongoing tight financing conditions were effective in the deterioration of the outlook.
In the statement, it was pointed out that the US economic growth was better than expected with 2.4 percent in 2023, but it was noted that growth is expected to decline to 1.2 percent in 2024 and a shallow recovery in 2025.
In the statement, it was emphasized that prolonged high interest rates and financial market volatility that may be seen if monetary policy and growth deviate significantly from current expectations are among the main risks, while tight financial conditions, slowing economic growth and sector-specific pressures on core asset classes indicate that risk trends are to the downside.
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Profits have fallen in many sectors, the statement said, adding that demand is expected to fall further as the economy slows in response to the lagged impact of tightening credit conditions.
The statement noted that rising unemployment and high cost of living pressures pose significant headwinds for asset classes and put pressure on the asset quality and operating profits of US banks.
On the other hand, while the outlook for most financial sectors in North America deteriorated, the outlooks for public finance and insurance sectors improved to “neutral”, the statement said, adding that inflationary pressures on US public finances were easing, while generally higher costs for public electricity could translate into rate hikes.