U.S. Debt Gridlock Is Top World Economy Risk: Chart of the Day

by Jennifer M. Freedman

U.S. debt gridlock is the biggest risk facing the global economy even after the U.S. avoided the so-called fiscal cliff when Congress reached an agreement on the budget in early January.

The CHART OF THE DAY shows the potential drag on global output from a deepening of the euro-region debt crisis, a resurgent U.S. fiscal cliff and slowing growth in China, according to data compiled by the United Nations.

The data were collected before President Barack Obama signed a law averting most of the $600 billion in tax increases and federal spending cuts. Still, the UN report assumed the U.S. would extend tax relief, Europe would move toward ending its crisis and China would avoid a “hard landing,” said Pingfan Hong, chief of global economic monitoring for the UN’s Department of Economic and Social Affairs.

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