WASHINGTON (Sputnik) — Fitch said Trump’s planned tax cuts and deregulation would be positive for US growth in the short term, reaching 2.2 percent in 2017, but would put pressure on sovereign creditworthiness over the medium term.
"Fitch expects a looser fiscal stance will lead to larger deficits and higher debt," the release stated. "We assume that tax cuts will deliver a fiscal loosening of around 0.7pp of GDP in 2017 and 2018, as a scaled-back version of Trump's campaign platform is adopted."
Additionally, there is a risk of US protectionism under a Trump administration, which would be negative over the medium term, the firm explained.
Fitch noted that Canada is highly dependent on trade with the United States and could be affected from Trump’s policies, but is less at risk than Mexico.
