A potential US government shutdown at the end of September could heighten concerns about the economy later in the year and beyond, investors said.

Current funding for most government programs expires on September 30.

If lawmakers fail to pass a new budget by that time, a significant portion of government functions will come to a halt, which, according to Goldman Sachs strategists, will lead to a 0.2% decline in US economic growth for each week.

A partial government shutdown that does not interfere with essential functions such as military or Social Security payments is considered less dangerous to the economy than a failure to raise the national debt limit, something lawmakers narrowly avoided earlier this year.

This time, however, investors may be more sensitive to the shutdown.

Failure to pass a budget would underscore the gridlock and political instability that ratings agency Fitch cited as the reason it downgraded the US credit rating in August, a move that rattled markets last month.

In addition, the shutdown could weaken the economy at a time when various factors, including the Federal Reserve’s tightening monetary policy and the resumption of student loan payments, pose a threat to growth, analysts said.

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