President Donald Trump speaks about the partial government shutdown. Photo / AP
President Donald Trump speaks about the partial government shutdown. Photo / AP
A global ratings agency has estimated that the recent partial government shutdown cost the US economy at least US$6 billion, according to a Reuters report.
Financial rating agency Standard & Poor released a report on Friday (US time) in which it analysed the cost to the US economy of the partial government shutdown, which finally ended after Trump signed a bill to reopen the federal government for the next three weeks.
The standoff was the longest government shutdown in the country's history, lasting 35 days, during which many federal workers were either furloughed without pay or told to work without receiving pay during that time.
I wish people would read or listen to my words on the Border Wall. This was in no way a concession. It was taking care of millions of people who were getting badly hurt by the Shutdown with the understanding that in 21 days, if no deal is done, it’s off to the races!
"Although this shutdown has ended, little agreement on Capitol Hill will likely weigh on business confidence and financial market sentiments," the company said in a statement.
The president backed down after a weekslong standoff with congressional Democrats, who refused to approve US$5.7 billion in taxpayer money to build a wall on the US-Mexico border. Trump had previously promised Mexico would pay for the wall during his campaign.
In the report, the S&P said that the overall cost to the US economy — which is worth about US$19 trillion — would be "likely worse than what we had previously expected", ABC News reported.
An earlier S&P estimate had stated that the partial government shutdown would have only a "modest impact" on the economy and that it would only lose about US$1.2 billion of its GDP for each week the shutdown lasted.
In Friday's report, however, the S&P stated that the upgraded damage to the US economy was due to the fact that "weekly costs likely widened beyond the average weekly cost of US$1.2 billion."
"Here, both direct costs, on lost productivity from furloughed government workers, and indirect costs, from lost economic activity to outside businesses because of the shutdown, amplified with each week the government remained closed," the S&P said, according to the statement obtained by ABC News.
21 days goes very quickly. Negotiations with Democrats will start immediately. Will not be easy to make a deal, both parties very dug in. The case for National Security has been greatly enhanced by what has been happening at the Border & through dialogue. We will build the Wall!
Prior to knowing that the shutdown would last five weeks, the S&P said it "had expected that other indirect costs were likely just delayed, with businesses recouping some of those losses once the government reopens its doors."
However, "with a five-week closure, we suspect that more of those economic activities indirectly tied to the government may have been outright cancelled," the agency said.
House Speaker Nancy Pelosi of Calif., accompanied by House Democratic members stand after signs a deal to reopen the government on Capitol Hill in Washington. Photo / AP
The bill Trump signed Friday reopened the government until February 15, meaning that about 800,000 government workers would be able to get their paychecks while Trump continued to demand his border wall money.
Should there continue to be no agreement over Trump's border wall money during the 21 day period, Trump tweeted Friday that "if no deal is done, it's off to the races!"
