Global investors say the state of the U.S. government’s finances is the greatest risk to the world economy and almost half are curbing their investments in response to continuing budget battles, a Bloomberg poll shows.
With the government within weeks of reaching its borrowing limit, 36 percent of respondents cite the nation’s fiscal woes as the biggest threat compared with 29 percent who choose Europe’s sovereign debt crisis and 15 percent who name a slowing Chinese economy, according to the quarterly poll on Jan. 17 of investors, analysts and traders who subscribe to Bloomberg.
“Without a so-called ‘grand bargain’ between Democrats and Republicans, the U.S. fiscal situation sets up a series of potential crises,” says Howard Wang, a portfolio manager at JF Asset Management Ltd. in Hong Kong. “Bad politics could offset a good economy.”
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