US PRESIDENT Donald Trump’s administration has doubled the estimated cost to the US economy caused by a partial government shutdown over the Mexico border wall funding row.
The US government has been partially “shut down” for the longest period in American history. The measure came into force shortly before Christmas because Trump could not secure funding for his controversial border wall project, which was a key campaign pledge. The economic damage from the shutdown is now estimated to be higher than originally anticipated, according to the White House.
The original estimate the partial shutdown would subtract 0.1 of a percentage point from growth every two weeks has now been doubled to a 0.1 percentage point subtraction every week, according to a Trump administration official.
The new forecast means the cost of the shutdown is likely to be twice as much as anticipated.
Mark Zandi, chief economist at Moody's Analytics, forecasted a half a percentage point hit to US GDP if the shutdown lasts throughout March, roughly a third of the administration's new estimate.
Mr Zandi said: “We estimate the shutdown will reduce first-quarter real GDP growth by approximately 0.5 percentage points.
“Of this, about half will be due to the lost hours of government workers, and the other half to the hit to the rest of the economy.”
As a result of the crisis shutdown, hundreds of thousands of government workers have gone without pay, with scores of federal institutions such as national parks closed off to the public.