Impact of attack will be ‘profound’, says report

The Economist Intelligence Unit (EIU) believes the economic impact of the World Trade Center attacks will be "far reaching and…

The Economist Intelligence Unit (EIU) believes the economic impact of the World Trade Center attacks will be "far reaching and profound".

It said efforts on the political front will be matched by concerted action by central banks to avoid a recession.

The EIU believes the fact that many countries are now teetering on the brink of recession - combined with weakened consumer and investor confidence caused by the attacks - could slow down the US domestic market.

The report also believes a new, hardening US foreign policy will be matched by economic action that in the long term could impact emerging markets (particularly in the Middle East and Central Asia) as the US becomes "more wary and restrained in its dealings with non-allied countries".

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The EIU is reporting the US is now the "dominant trading or investment partner", with 100 emerging markets of the economies it has studied.

In the short term, the EIU believes a major change resulting from the World Trade Center attack will be an increase in insurance premiums and a significant deterioration in the international currency markets.