(Reuters) -Ratings agency Fitch said on Wednesday it had put the United States' "AAA" rating on negative credit watch, citing increasing political disputes around the country's debt limit.

President Joe Biden's administration and congressional Republicans are at an impasse over raising the federal $31.4 trillion debt ceiling, with both sides casting the other's proposals as too extreme.

Fitch said that the country's rating could be lowered if the U.S. does not raise or suspend its debt limit by the given date.

However, it added that chances of the U.S. not repaying its debts on time are very low.

Fitch now predicts that the U.S. government will spend more than it earns, creating a deficit of 6.5% of the country's total economy in 2023 and 6.9% in 2024.

(Reporting by Akriti Sharma in Bengaluru; Editing by Anil D'Silva)