US shutdown subtracted US$11b from GDP, according to congressional report

While most of the GDP will be recovered, some private sector entities might never recoup the lost income— Reuters pic
While most of the GDP will be recovered, some private sector entities might never recoup the lost income— Reuters pic

WASHINGTON, Jan 28 — The five-week US government shutdown subtracted US$11 billion (RM45.2 billion) from the economy, about twice the amount President Donald Trump sought to fund a border wall, a congressional body said today.

However, all but US$3 billion, or 0.02 percent of GDP, will eventually recover as the government resumes operations, the non-partisan Congressional Budget Office said in a report.

“Underlying those effects on the overall economy are much more significant effects on individual businesses and workers,” the report said.

“Some of those private-sector entities will never recoup that lost income.”



Growth in subsequent quarters this year should see a small bounce, compensating for the losses in the final quarter of 2018 and the start of 2019, the report said.

The partial shutdown, the longest in US history, left some 800,000 federal workers either working without pay or furloughed although they are due to receive back pay this week.

With public services including aviation safety beginning to buckle under the strain of withheld wages, Trump agreed Friday to reopen the federal government temporarily, with no additional funding for the wall. The border wall to stem illegal immigration was a signature pledge from his 2016 campaign.

Funding for the government is due to run out by mid-February and Trump told The Journal yesterday that the odds were below 50 per cent that lawmakers would reach a deal on border security he would find acceptable.

The border wall to stem illegal immigration was a signature pledge from his 2016 campaign. — AFP

Source: The Malay Mail Online





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