Fitch warns Trump’s actions could threaten World Bank’s AAA credit rating

The World Bank and other international financial institutions could face a credit rating downgrade if U.S. President Donald Trump follows through on plans to cut funding, global ratings agency Fitch warned on Tuesday. The statement comes just a day after Moody’s raised similar concerns, highlighting growing uncertainty about the future of these institutions.

Trump recently signed an executive order mandating a review of U.S. funding for all international organizations in which the country is a member. The review, which is set to last six months, will determine whether the U.S. withdraws, reduces, or demands reforms in its financial commitments to these institutions.

According to Fitch, any indication that the U.S. could pull its support would create negative pressure on credit ratings for affected organizations. The agency emphasized that a loss of U.S. backing would severely impact the financial stability of these institutions, as the United States is a major shareholder in many global development banks.

The U.S. holds a 16.4% stake in the International Bank for Reconstruction and Development (IBRD) and a 19% share in the International Development Association (IDA), both part of the World Bank Group. It also controls 15.6% of the Asian Development Bank (ADB), 10% of the European Bank for Reconstruction and Development (EBRD), and 30% of the Inter-American Development Bank (IADB), making it the largest shareholder in these institutions.

While Fitch and Moody’s both acknowledged that a full U.S. withdrawal remains unlikely, they cautioned that such a move would have far-reaching consequences. A loss of U.S. financial backing could lead to a massive funding gap, forcing other member countries to reconsider their commitments. The ripple effect could ultimately damage the credibility and effectiveness of these institutions in financing global development projects.

If the U.S. decides to reduce or halt contributions, Fitch warned that the affected institutions would be placed on the Rating Watch Negative list, signaling that a downgrade is under consideration. The final decision on whether the World Bank and others will lose their AAA rating will depend on how the U.S. exit is structured and how other shareholders respond.

With growing uncertainty in global financial markets, the prospect of a weakened World Bank and reduced multilateral cooperation could have significant economic and geopolitical consequences, Fitch noted.