US Government Shutdown Begins to Shake the Country's Economy!
The budget crisis in Washington, which has caused a partial shutdown of the United States government, is beginning to have a serious impact on the national economy. The latest data shows that more than 750,000 federal workers have been furloughed, while thousands of private contractors working for the government have also lost income. This situation directly suppresses household purchasing power and weakens domestic consumption—a key component of the US economy.
The shutdown, which has been ongoing for several weeks, has also delayed a number of public services and government projects, including business permits, product certifications, and social assistance programs. A Brookings Institution report states that this public service shutdown has begun to hamper business activity and create uncertainty among small and medium-sized businesses.
As a result, US economic growth is expected to slow sharply. The Congressional Budget Office (CBO) estimates that the shutdown could reduce gross domestic product (GDP) growth this quarter by 1–2 percentage points, depending on how long the crisis lasts. Reuters reports that overall economic losses could reach US$7–14 billion, some of which will be irrecoverable.
The private sector and tourism have also been hit. National park closures, airport security disruptions, and travel permit delays are causing the tourism industry to lose up to US$1 billion per week in revenue, according to data from the U.S. Travel Association. Meanwhile, small businesses that rely on government contracts or loans are beginning to face liquidity crises due to the administrative downturn.
Furthermore, consumer sentiment and business confidence have declined sharply, worsening the economic outlook ahead of the year-end shopping season. "A prolonged shutdown has not only delayed economic activity but also undermined market confidence in the government's fiscal management," JPMorgan analysts said in a report.
While some economists believe the impact is temporary and will recover once the government is fully operational, the damage to productivity and public confidence is feared to have long-term consequences. To date, budget discussions in Congress have yet to reach a resolution, while pressure on the US economy continues to increase daily.
Source : Newsmaker.id
