It notes the US’s fiscal cliff represents the biggest single problem facing government finances and economic growth next year, though it believes the impending crisis will be resolved.
The ongoing Eurozone problems are also a key factor, as well as wider growth concerns.
The fiscal cliff has the “potential to tip the US into an unnecessary and avoidable recession, with negative implications for global growth,” noted its report.
However, the agency expects a deal will eventually be made, to dodge the $600bn (£368.7bn) in automatic tax rises and spending cuts which are due to come in the new year.
“Fitch still anticipates a material fiscal tightening of 1.5 per cent in the US economy in 2013, but this falls well short of the five per cent implied by the fiscal cliff.”
The renewed Eurozone recession also presents a challenge to government finances and the global economy.
“Significant challenges still confront policy-makers, both in terms of moving towards greater fiscal and financial risk sharing and in breaking the negative feedback loop between sovereigns and their banking systems,” Fitch noted.
And it added the UK’s negative outlook “reflects concerns over limited fiscal headroom, high debt levels and a weaker than expected recovery”.
The UK is struggling to get its borrowing down, despite political rhetoric around spending cuts.
The latest figures from the watchdog, the Office for Budget Responsibility, expect the deficit to fall only slowly in the coming years, coming in at 6.1 per cent of GDP in 2013-14, 5.2 per cent the following year and 4.2 per cent in 2015-16.
That will send the national debt to peak at 79.9 per cent of GDP in 2015-16, missing earlier targets for it to be in decline by that year.