US Immigration Crackdown Could Cost Its Economy Dearly, Report Warns

A major international financial body has singled out Washington’s crackdown on immigration as a significant threat to US economic growth. In its latest global outlook, the institution warned that these policies could reduce the country’s GDP by 0.3% to 0.7%, a substantial impact that would have global repercussions.
The report details how certain sectors of the US economy are particularly vulnerable. Industries such as construction, hospitality, personal services, and farm work, which have historically relied on immigrant labor, could experience acute labor shortages. This would not only hamper their output but also create “stronger inflationary pressures” than in other parts of the economy.
This warning comes within a broader analysis that, while upgrading this year’s global growth to 3.2%, describes the overall economic future as “dim.” The apparent strength of the economy is seen as a temporary phenomenon, partly caused by companies and households rushing purchases to beat the implementation of trade tariffs.
The full, negative effect of those tariffs is still expected to materialize, potentially depressing business investment over the medium term. The report uses the slow economic decline in post-Brexit business investment as a parallel, suggesting the world is yet to feel the true cost of the recent shift towards protectionism.
Meanwhile, the UK faces its own set of challenges. Despite a growth upgrade to 1.3%, it is forecast to have the G7’s highest inflation rate in the coming years. This, combined with risks from frothy global stock markets, has led to advice for its central bank to maintain a cautious stance on monetary policy.