A new global economic report has drilled down on the specific, real-world consequences of the US immigration crackdown, warning it could trigger an inflation crisis in key sectors of the American economy. Industries like construction, hospitality, personal services, and farm work are singled out as being acutely vulnerable to “stronger inflationary pressures” due to their reliance on immigrant labor.
This sector-specific warning is part of a broader, pessimistic assessment of the global outlook, which is described as “dim.” The report calculates that the US immigration policy could not only fuel inflation but also reduce the nation’s overall GDP by a significant 0.3% to 0.7%. This demonstrates how domestic policy can create powerful economic headwinds.
These concerns are voiced even as the headline global growth forecast for 2025 has been revised upwards to 3.2%. The report cautions that this “unexpected resilience” is fragile and does not account for the building pressures from policy shifts, including the yet-to-be-fully-felt impact of trade tariffs on business investment.
The United Kingdom provides another example of inflation risk, though for different reasons. The country is projected to have the highest inflation rate in the G7 over the next two years, a situation attributed to strong wage growth and rising public expectations. This highlights how inflation is becoming a major, multifaceted threat in key Western economies.
While Wall Street’s focus may be on AI and “stretched valuations,” the report brings the focus back to Main Street, arguing that the availability of labor is a critical, and increasingly threatened, component of economic stability and price control.