LONDON, March 13 Reuters With fears of a U.S. recession wiped away and financial markets bulled up on the growth trajectory again, an immigration fillip is playing a key role and may even prove disinflationary to boot.

Likely one of the hottest of hot button issues in this year39;s White House election, upward revisions to U.S. immigration estimates have economists and investors rethinking the economic and inflation outlooks yet again.

Resulting higher growth forecasts and likely easing of labor supply bottlenecks speak to some of a potential holy grail for the economy.

But the new estimates also sharpen the edge of November39;s election outcome where President Joe Biden and likely challenger Donald Trump are clearly at loggerheads on how to handle the issue.

In its longterm economic and fiscal projections released last month, the U.S. Congressional Budget Office CBO flagged rising net immigration as mainly responsible for a forecast 5.2 million increase in the workforce over the next 10 years adding some 7 trillion to economic output and 1 trillion to tax revenue.

The nonpartisan budget referee took from its 30year demographic projections, in January, where it revised up its estimate of net immigration compared with a year earlier by some 8.3 million people for the six years through 2026.

The changes mean it now reckons the overall labor force will be 2.6 larger in 2053 that it assumed only a year ago. And as declining fertility rates would have seen the national…