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S&P says US economy loses $6 billion due to shutdown
S&P says US economy loses $6 billion due to shutdown

According to S&P Global Ratings, the US economy lost at least $6 billion during the shutdown of the federal government.

As cited by analysts, a 35-day closure dampened productivity and economic activity in the United States. Last Friday, January 25, US President Donald Trump agreed to reopen the government allowing state employees to get back to work.

The shutdown became the longest in the history of the United States. It affected 9 out of 15 departments and a number of federal agencies. "Although this shutdown has ended, little agreement on Capitol Hill will likely weigh on business confidence and financial market sentiments," S&P noted.

Experts believe that the temporary closure of the US government may cause a reduction in revenues and cash infusions of public service private contractors. Many leading suppliers of public services suffered from the shutdown. Two major companies, Leidos Holdings Inc. and SAIC, provide over 35 percent of their sales to civilian government departments. SAIC losses amounted to about $10 million due to the suspension of the government's work. The company believes that the government should reimburse all expenses.

According to preliminary estimates by the Congressional Budget Office, the shutdown cost 0.1 percent of GDP in the first quarter of 2019. S&P Global predicts that the US economy will grow by 2.3 percent in 2019 and by 1.8 percent in 2020.

Published: 2019-02-07 15:51:05 UTC
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