The migrant crisis affecting Europe has profound investment implications, according to BlackRock.

The asset manager believes significant inflows of migrants can push up the GDP of European countries.

At the release of the BlackRock Investment Institute’s ‘2016 Investment Outlook’, the manager discussed the impact of migrant inflows into Europe, suggesting it would benefit the macroeconomic indicators of countries where migrants eventually settle.

Such improved macroeconomic indicators would make those countries more attractive from an investment standpoint, it said.

Following the terrorist attacks in Paris last month, Europe’s politicians have intensified their focus on internal security, which might result in tighter controls on migrants’ movements.

BlackRock, however, proposes that, from an economic point of view, “it is most relevant to consider in which countries the migrants end up.”

Speaking at a media briefing following the release of the company’s outlook for next year, Scott Thiel, BlackRock’s deputy CIO of fundamental fixed income, said: “Notwithstanding the political issues, which are separate, the impact of migration should be positive for the countries involved.”

Thiel explained that, in BlackRock’s view, the first order effect of migration is on government spending.

This has to increase so that the immediate needs of migrants, such as housing, can be dealt with.

A 1% increase in government spending can lift real GDP by to 0.3%, noted Thiel.

He then argued that investors should consider the positive, long-term macroeconomic impact of having a young labour force.

Countries such as Sweden or Germany, which migrants are choosing as their preferred destinations, should benefit the most.

Conversely, a curb on immigration by the UK, in the event of a Brexit, could impact GDP negatively, according to BlackRock.

A hypothetical shift from the current net inflow of migrants into the UK, which is around 330,000 a year, to 100,000 post-Brexit could take 0.5% off the country’s output.

Thiel added that the current European Central Bank’s growth forecasts did not take into account the effect of immigration.

This is one of the reasons why, in BlackRock’s outlook, European growth could surprise on the upside.

“The combined effect of monetary easing and the fiscal easing that took place in 2015 could determine an upswing in the European economy,” Thiel said.

He conceded, however, that this scenario did not take into account changes in the Schengen Agreement that would affect the intake of migrants.