Credit rating agency says that fiscal stimulus has boosted growth

US economy grew by four per cent in the last 2 years due to stimulus, according to Fitch.

Fitch Ratings office in Paris.
Photograph: Getty Images

The United States' credit rating has grown by four per cent in the last two years, according to a joint study by the credit rating agency Fitch and consultancy firm Oxford Economics.

The report, entitled Gauging the Benefits, Costs, and Sustainability of US Stimulus, which is published today, states that President Obama's fiscal stimulus policy has contributed to preventing a longer and deeper recession.

Obama signed the American Recovery and Reinvestment Act (ARRA) in 2009 which invested in infrastructure, education, police, health and green energy. The objectives behind the ARRA were based on the Keynesian macroeconomic theory that in order to offset further deterioration during a recession, governments should increase public spending in order to save jobs.

The findings come as a contrast to last week's news that the UK, currently embroiled in an austerity programme led by chancellor George Osborne, has reached a double-dip recession. Similar economic methods across the Eurozone have led to a series of social unrest.

However, the report said that the future of the US economy remains uncertain:

The uncertain future growth trajectory of the U.S. economy increases risk in general. This uncertainty, in turn, has the potential to affect the creditworthiness of all U.S. sectors, as well as foreign firms dependent on the U.S. as an export market. Consequently, Fitch anticipates limited rating upgrades within those sectors most closely tied to the U.S. economy until it becomes clearer that organic growth in the broader economy is taking hold.