Economic impact of US bombings

The crisis had an immediate impact on world financial markets. The news sent all European stock exchanges plummeting and the Prague Stock Exchange was no exception. On Tuesday afternoon local time, Czech stocks fell to an all-time low. Wednesday saw trading on the Prague Stock Exchange postponed by two hours, and trading at the RMS stock exchange has been suspended until further notice. Vladimir Tax has the story.

Although the European markets stabilised after a few hours of trading on Wednesday, there remains uncertainty as to further developments. Economic analyst Ondrej Schneider from Patria Finance says it is difficult to asses the full scope of the impact the tragedy in New York may have on the global economy and subsequently on national economies.

"We do not know yet. It is difficult to asses the impact on the American economy, it is much more difficult to asses the impact on the Czech economy because we are quite far away from the U.S. What we can speculate about is that when the US economy slows down and even falls to recession, we will feel it in Europe with some delay. The Czech economy us heavily dependant on the German and other Western European markets, so if the Western European markets are doing bad after American recession, then indeed, we will feel it."

"There is one aspect which I would like to mention, 2001 may be the first year in history when the global output, the 'global domestic product', may stagnate or even fall. That has never happened before and nobody is sure what it means, how the economies react. We had quite a difficult situation before the attack and now the situation is getting even more precarious and it is quite difficult to make estimates."