IMF warns of economic hit from extended government shutdown

Washington: While it is too soon to gauge the economic damage from the US government shutdown, the longer it continues the worse it will be, the International Monetary Fund warned Thursday.

The shutdown that has left 800,000 federal workers nationwide without pay is the longest on record and now in its fourth week.

“The longer the shutdown is in effect the bigger impact it will have on the economy,” IMF spokesman Gerry Rice told reporters.

“We encourage the US authorities, in both Congress and the executive branch, to work together in a spirit of compromise to pass a funding bill that can reopen the federal offices.”

However, he said it is “still very early days in terms of making an economic assessment of the impact of the shutdown.”

The IMF is due to release a quarterly update of its World Economic Outlook on Monday, which will include a new estimate for US GDP growth.

Some economists project the shutdown could trim a tenth of a point off US GDP in the first quarter, and even the White House acknowledged that the impact will be worse that initially thought, according to reports.