GDP will be Lower if Immigration Turns Negative

by ukcivilservant

Much of the Brexit debate has been about UK population growth, especially that caused by immigration from the rest of the EU. It’s therefore worth remembering that GDP is broadly proportional to population.  GDP/Head is a better indicator of economic success. This chart compares UK data since 1971.

Screen Shot 2017-10-15 at 14.29.21

c0.8% pa of recent GDP growth may be attributed to population growth:

Screen Shot 2017-10-15 at 14.29.41

GDP is now 17% higher because of our increased population since the 1970s – that is the gap between the blue and red lines in the first chart above:

Screen Shot 2017-10-15 at 14.29.58

Implications?

  • GDP growth will decrease if EU immigrants leave.
  • Much government expenditure is broadly proportional to population so HMG could then spend less.
  • But long term international political influence depends on economic strength.
  • Could there, in particular, be serious implications for e.g. defence and infrastructure expenditure?

Martin Stanley

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