Massive migrant influx will fuel economic growth in long-term: IMF

The massive arrival of migrants in the European Union will burden member states’ budgets in the short term but ultimately fuel economic growth, the chief economist of the International Monetary Fund (IMF) said on Tuesday.

The massive arrival of migrants in the European Union will burden member states’ budgets in the short term but ultimately fuel economic growth, the chief economist of the International Monetary Fund (IMF) said on Tuesday.

International Monetary Fund (IMF) Economic Counselor Maurice Obstfeld answers questions during the World Economic Outlook press conference at the 2015 IMF/World Bank Annual Meetings in Lima, Peru, on October 6, 2015. (AFP Photo)

The arrival of hundreds of thousands of migrants in the EU, many fleeing the civil war in Syria, has unleashed a crisis for the bloc, but in the long term it will help its economies by expanding the labour force, said Maurice Obstfeld, the IMF’s new economic research director.

“Accommodating the inflows of refugees will definitely strain fiscal budgets in some countries,” he told a press conference in the Peruvian capital Lima, where the IMF and World Bank are holding their annual meetings this week.

Greek Prime Minister Alexis Tsipras, right, and Austrian Chancellor Werner Faymann visit a refugee camp for Syrians at the city of Mytilene on the island of Lesbos, Greece, on October 6, 2015.

According to the United Nations, some 700,000 migrants and refugees will make the dangerous trip across the Mediterranean to Europe this year, with a similar number expected again next year. The influx has caused conflict among the EU’s 28 members and led to a partial breakdown in their open-border system as member states struggle to cope.

Refugees and migrants sleep in front of a graffiti covered wall depicting a human eye at the port of the city of Mytilene on the island of Lesbos, Greece, on October 6, 2015. Austrian Chancellor Werner Faymann became the first European Union leader to visit the Greek island of Lesbos to see the impact of Europe's migrant crisis on one of the refugees' preferred entry points into the EU.

A migrant sleeps in front of a graffiti covered wall depicting a face and the Greek national flag at the port of Mytilene on the island of Lesbos, Greece, on October 6, 2015.

He emphasized that the Middle East has borne the brunt of the migrant crisis -- more than four million Syrians have taken refuge in neighboring countries.

A migrant grabs a razor wire-topped fence as the Greek prime minister Alexis Tsipras visits a refugee and migrant registration camp in Mytilene, on the Greek island of Lesbos, on October 6, 2015.

“There’s been a lot of focus of the European aspect of the problem, but there are countries in the Middle East that are facing pressure and which the Fund has been trying to help by easing fiscal targets,” he said.