News / Economy

World Markets Unfazed by US Government Shutdown

A pedestrian walks past a stock quotation board displaying various countries' share indices, outside a brokerage in Tokyo Oct. 1, 2013.
A pedestrian walks past a stock quotation board displaying various countries' share indices, outside a brokerage in Tokyo Oct. 1, 2013.
VOA News
World stock markets are reacting calmly to the partial shutdown of the U.S. government.

Asian markets ended mixed Tuesday, while key indexes in Frankfurt and Paris advanced more than 1 percent.  U.S. markets edged higher in afternoon trading in New York.

The value of the U.S. dollar, however, slid against world currencies, on fears that the first shutdown of the U.S. government in 17 years could prove to be a drag on the slowly improving American economy, the world's largest.

One market research company, IHS estimated that the work stoppage at many U.S. agencies and the furloughing of 800,000 government workers would cost the U.S. economy at least $300 million a day in lost economic output.

Analysts say the effect of a short shutdown might be relatively small on economic growth.  But one U.S. economist, Jim O'Sullivan of High Frequency Economics, said the impact could worsen if the shutdown extends for more than a few days.

"The more time that elapses, the more disruption there will be.  But I think markets are forward looking. We've seen this before, to some extent.  At the end of the day, it's just not going to be a huge factor for the economy," said O'Sullivan.

Consumer spending accounts for about 70 percent of the U.S. economy.  The analysts say U.S. economic fortunes could be more broadly impacted if fears persist that the White House and Congress cannot reach an agreement to end the stalemate over government funding and the implementation of President Barack Obama's signature legislative achievement, health care reforms that are now taking effect.

World markets appear most concerned with whether Congress and Mr. Obama can reach an agreement to increase the country's $16.7 trillion borrowing limit.  The U.S. is expected to reach the debt limit by October 17, at which point the country could run out of money to pay all its bills.  The country, for the first time, could default on its financial obligations, including payment on bonds held by overseas investors.

Numerous political and economic analysts say a U.S. default would likely roil world financial markets.  But O'Sullivan said he does not think that Washington is so irresponsible it would allow the country to default.

"We've never not met our obligations....the debt limit will be dealt with," he said.

You May Like

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.