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Time of India

America needs immigrants. Without them, the world's most powerful economy is in trouble

A Federal Reserve Bank of Dallas study warns that Trump-era immigration restrictions and deportations could reduce U.S. GDP growth by 0.8 percentage points in 2025. The main driver is a sharp decline in border crossings, not deportations. Under a mass deportation scenario, growth could fall by up to 1.5 points by 2027. Inflation may rise slightly. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Trump administration's curbs on immigration and ramped-up deportations will lower US economic growth by almost a full percentage point this year, according to a study from the Federal Reserve Bank of Dallas The drastic drop in immigrants across the southern border and increased efforts to deport more foreign-born workers could subtract about 0.8 percentage point from gross domestic product in 2025, according to an analysis by economists including Pia researchers — who acknowledged that the limited availability of historical data makes their findings highly uncertain — examined how five different decreased immigration scenarios would impact GDP and inflation. They found the biggest hit would be to growth, with a slight increase to inflation this year from the new at the US-Mexico border dropped sharply last year and continued to decline after President Donald Trump's election. Trump has initiated a large-scale effort to deport undocumented immigrants and has encouraged people to leave by removing deportation protections for many foreign border crossings — not deportations — are the biggest driver of the hit to growth, the researchers found, accounting for 93% of the projected GDP a 'mass deportation' scenario in which 1 million immigrants are removed per year by the end of 2027, annual GDP growth would be nearly 0.9 percentage point lower by the end of 2025, and 1.5 percentage points lower by the end of 2027, the researchers expect US growth to cool to a 1.5% pace in 2025, according to a Bloomberg survey, from close to 3% in each of the previous two years.