WEF Davos 2016: Asylum seekers' inflow to have expansionary effect on economy

Davos: The refugee challenge facing Europe can be harnessed for the benefit of all, with the help of appropriate policies, especially effective integration into the labour market, IMF said.

The International Monetary Fund (IMF) today released a new staff report looking at the refugee surge into Europe which said the macroeconomic effect from the refugee surge is likely to be a modest increase in GDP growth.

"The surge in refugees is a challenge facing many parts of the world. It also has many dimensions - social, political, and economic," IMF Managing Director Christine Lagarde, who presented the report here today said.

According to the report, the effect will be modest for the EU as a whole (raising the level of GDP by some 0.1 percent in 2017), but more pronounced in the main asylum seeker destination countries.

The impact of the refugees on medium and long-term growth depends on how they will be integrated in the labour market.

"Today we are publishing a new study from IMF staff which focuses on the economic dimension of the refugee challenge facing Europe. The study indicates that, with appropriate policies - especially effective integration into the labour market - the potential from refugees can be harnessed for the

benefit of all," Lagarde said.

She further added that "the circumstances facing each country are different and so should be the response but, ultimately, the refugee surge is a global challenge that must be met through global cooperation."

The report noted that quick labour market integration can unlock the potential economic benefits of the refugee inflow.

It would also minimize the risk of social exclusion for the newcomers and maximize their net contribution to the public finances in the longer term.