Risks to the upside for euro-zone net migration

Net immigration to the euro-zone has been very high in recent years, and the risks are skewed towards it exceeding the European Commission’s projection of 0.3% per year over the long term. The historical trend suggests it could average 0.4%-0.5% while a tight labour market and shrinking working age population suggests it could be even higher. Nonetheless, given the decline in the native-born population, the demographic outlook for the region is still likely to be a drag on economic growth.