WASHINGTON, Oct. 1 (Xinhua) -- The ongoing partial federal government shutdown and fiscal uncertainties are dampening American economic recovery, and a default on U.S. debt payments would have "immediate and substantial" negative effects on the country's economy that would be difficult to quickly reverse, said David Stockton, a senior fellow at the Peterson Institute for International Economics (PIIE).
"A brief shutdown is disruptive, but not likely a systemic macro event," Stockton said Tuesday at an event on the first day of the partial shutdown of the U.S. federal government agencies.
U.S. lawmakers failed to agree to a spending bill for keeping the federal government running beyond midnight of Sept. 30, which finally forced the U.S. federal government to a partial shutdown starting Tuesday for the first time in 17 years. Tuesday also coincided with the first day of the U.S. 2014 fiscal year.
The federal government shutdown each week will cost the United States about 0.15 percent of the growth in the fourth-quarter gross domestic product (GDP), predicted Stockton, also former chief economist at the U.S. Federal Reserve.
However, if U.S. Congress fails to meet a mid-October deadline to raise the country's debt ceiling, it will be "a major macro systemic event" and will lead to financial volatility and depressed household and business confidence, he stressed.
A partial government shutdown for several weeks or a month would not have a significant impact on weakening the U.S. dollar or delaying the Fed's decision of tapering off its third round of quantitative easing (QE3), compared with the potential impact of a debt default crisis, he said in answering questions posed by Xinhua.
U.S. economic growth rate is projected to be only 1.9 percent this year from a year earlier, and gradually accelerating to 2.9 percent next year, and 3.2 percent in 2015, Stockton predicted.
U.S. economic growth outlook has been revised downward from 2.3 percent, 3.1 percent, and 3.3 percent for the three consecutive years from earlier estimates given in April, respectively, as the talk of the Federal Reserve's monetary stimulus taper has driven interest rates up, and the government spending cuts and fiscal uncertainties are also holding back economic activity, he added.
U.S. Treasury Secretary Jacob Lew has warned that a debt limit agreement needs to be reached no later than Oct. 17. Lawmakers will therefore have to come together to agree to raise the nation' s debt limit of 16.7 trillion dollars or risk defaulting on its payment obligations for the first time in history.