Migration From East Europe Hampers Region's GDP: IMF Note

Migration from east Europe hampers region's GDP: IMF note

WARSAW, (Pakistan Point News - 20th july, 2016): Mass economic migration from eastern Europe to wealthier countries has benefited the host nations but hampered growth in migrants' places of origin, an International Monetary Fund discussion note said Wednesday. Nearly 20 million people have left eastern Europe -- some 5.5 percent of the population -- over the quarter century since the collapse of communism, said the note that does not represent the IMF's official view.

"Because of the sizeable share of skilled emigrants, it has likely benefited the main receiving countries in the EU and, therefore, the EU as a whole," said the report. "Labour outflows tend to reduce the sending countries' GDP per capita, with the size of the impact depending on... the age and skill composition of migrants." The study said that in 2012, GDP in central and southeast Europe would have grown by 7 percentage points if it had not been for the mass migration away from the region between 1995 and 2012.

The exodus of skilled labour "contributed to fiscal burdens arising from" the distorted ratio of people in work to those not in employment, said the report. It also warned that the departure of highly educated people could slow progress and innovation in the societies they left behind. The report acknowledged that while money sent back by migrants can "to some extent, mitigate the negative effects of mass migration", it warned that it may also damage the work ethic of those who received such payments.

Reduced levels of GDP growth due to migration are likely to continue if forecasts of migration between now and 2030 are accurate, warned the report. "The cumulative output loss may be as large as close to 9 percent," it said. Small Baltic countries as well as Bulgaria and Romania are likely to be hardest hit. Though countries in the region that receive migrants including the "Czech Republic, Hungary, and Russia, would experience output gains". The report suggested that countries suffering from large outflows of migrants should take steps to curb migration and attract skilled workers from abroad.