There are only 21 million bitcoins in the world. It is finite. Its supply is limited. If people keep losing their BTC due to loss of wallet seed phrase there will definitely be a decline in supply unless in the case where they can be recovered. For example, a person who dies and didn't tell his family members that he has bitcoins or the recovery phrase. The bitcoins is lost forever and the amount in circulation declines. Although, in my estimation, the effect will be infinitesimal. So, there is nothing to be perturbed about.
There are 21 million bitcoins that will be ever generated and almost 19 million bitcoins are mined so far. Bitcoin is said to have a controlled inflation rate, i.e., its supply will increase at a certain rate and it will become constant after last bitcoin will be mined (expected in 2140). So if some bitcoins are lost forever then it means we are further decreasing down the bitcoins that are in circulation. The more coins we lose, more rear bitcoin will be.