Another gov't shutdown would harm U.S. economic growth: survey

Source: Xinhua| 2019-02-08 04:59:29|Editor: Mu Xuequan
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WASHINGTON, Feb. 7 (Xinhua) -- As a deadline to reach a deal over border-wall funding draws closer, economists have warned that a second government shutdown would hurt U.S. economic growth, which was already undermined by a 35-day partial shutdown.

According to a recent survey by The Wall Street Journal (WSJ) released Thursday, nearly 60 percent of the private-sector economic forecasters said another shutdown would have "somewhat" of an impact on economic growth, while 16 percent said the impact would be "significant."

"A second shutdown would severely erode consumer and business confidence," the WSJ quoted Thomas Kevin Swift, chief economist at the American Chemistry Council, as saying.

The record-long partial shutdown, which ended Jan. 25, cost the U.S. economy approximately 11 billion U.S. dollars, a report from the Congressional Budget Office (CBO) said last week.

The five-week shutdown reduced real gross domestic product (GDP) in the fourth quarter of 2018 by 3 billion U.S. dollars, or 0.1 percent, and could lower GDP in the first quarter of 2019 by 8 billion dollars, or 0.2 percent, the report said.

Despite an expected rebound in the subsequent quarters, the CBO estimated that about 3 billion dollars lost in real GDP won't be recovered. That equals 0.02 percent of the projected annual GDP in 2019.

President Donald Trump signed a bill two weeks ago to fund the government through Feb. 15, leaving more time for the White House and Democrats to negotiate over border security, the impasse over which led to the longest-ever government shutdown.

When delivering his State of the Union address Tuesday night, Trump resumed his defense of his long-demanded U.S.-Mexico border wall, saying that "I'll get it built."

The president said the border wall with Mexico will be "a smart, strategic, see-through steel barrier -- not just a simple concrete wall."

If the White House and the Democrats fail to reach an agreement to provide funding for the border wall before Feb. 15, the government could be partially shut down again.