OECD’s Chief Economist Highlights Importance of Immigration Amidst US Visa Restrictions
The Organisation for Economic Co-operation and Development (OECD) has revised its global growth projections upwards to 3.2% in 2025, though it warns of several signs of slowing down. Amidst these updates, the OECD’s chief economist, Álvaro Pereira, emphasizes the critical role of immigration in the US economy as Washington imposes visa restrictions in the tech sector and pursues undocumented immigrants.
OECD’s Global Growth Projections and the Impact of US Tariffs
According to Pereira, the effects of US tariffs on global growth take time to manifest. Many companies worldwide anticipated these tariffs and adjusted their export strategies to circumvent them, exporting to the US and other countries. However, Pereira notes that there is already a slower growth rate and higher-than-expected inflation.
US Visa Restrictions and Their Potential Impact on the Economy
Question: With increased global growth projections for 2025, does the OECD show less pessimism about the effect of US tariffs on the economy?
Answer: The impact of tariffs takes longer to feel in the economy, partly because many businesses in numerous countries anticipated these tariffs before their implementation. They took proactive measures to export to the US and other countries to avoid these tariffs. Nevertheless, we are witnessing slower growth and higher inflation than initially projected.
The Role of Highly Skilled Immigrants in the US Economy
Question: With restrictions on tech visas in the US, is Donald Trump’s pressure on immigrants a threat to the US economy?
Answer: Continuously attracting highly skilled individuals, both from the US and globally, remains a crucial advantage for the US economy. This advantage will only intensify with the rise of artificial intelligence, given the significant labor shortage in the tech sector. The US and Germany are among the OECD countries experiencing the most substantial labor shortages in these sectors.
Fiscal Policies and High-Wealth Taxation in Europe
Question: Is high-wealth taxation a viable solution for restoring public finances in Europe?
Answer: Rather than focusing on a specific tax, it’s essential to determine the appropriate fiscal policy and spending-cut measures to achieve a lower debt level. The OECD suggests that the best way to save is by prioritizing debt reduction. Different countries propose varying methods, such as through VAT, income tax, or other taxes, and reducing spending.
Pereira stresses the importance of regulatory and business environment reforms in Europe, as higher taxes and stricter regulations may drive businesses to invest elsewhere instead of in Europe.
Key Questions and Answers
- Question: How does the OECD view the impact of US tariffs on global growth?
- Question: What is the significance of immigration for the US economy, especially with tech visa restrictions?
- Question: Could high-wealth taxation be a solution for restoring public finances in Europe?
Answer: The effects of US tariffs take time to be felt in the economy, as many companies worldwide anticipated these tariffs and adjusted their export strategies accordingly.
Answer: Attracting highly skilled individuals from both the US and globally remains crucial for the US economy, especially with the growing importance of artificial intelligence and labor shortages in the tech sector.
Answer: The OECD emphasizes the importance of implementing appropriate fiscal policies and spending-cut measures to achieve lower debt levels. Various methods, such as through VAT, income tax, or other taxes and reducing spending, are proposed by different countries.
