WASHINGTON (dpa-AFX) - While the federal government has finally reopened, a report from the Congressional Budget Office estimates the record-setting shutdown will still have a permanent, negative effect on the economy.
The CBO estimated that reduced economic activity as a result of the shutdown lowered gross domestic product by $3 billion in the fourth quarter of 2018 and by $8 billion in the first quarter of 2019.
As a percentage, the level of real GDP was reduced by 0.1 percent in the fourth quarter and is expected to be reduced by 0.2 percent in the first quarter.
Most of the real GDP lost during the shutdown will eventually be recovered in subsequent quarters, although the CBO estimates that about $3 billion will not be.
The CBO predicted that some private-sector entities that lost business due the shutdown will never recoup that lost income.
However, the CBO noted the permanently lost GDP reflects just 0.02 percent of projected annual GDP in 2019.
The release of the CBO report comes just days after President Donald Trump agreed to reopen the government for three weeks despite not receiving a guarantee of funding for his controversial border wall.
Trump indicated that the three weeks will give lawmakers time to negotiate on the contentious issue of border security.
'Many disagree, but I really feel that, working with Democrats and Republicans, we can make a truly great and secure deal happen for everyone,' Trump said last Friday.
However, if an agreement on border security is not reached by February 15th, Trump suggested the government could shut down again or he could declare the situation on the border a national emergency.
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