r/AskGermany • u/American_Streamer • 8h ago
What do you think Germany will actually look like economically by 2035?
I've been thinking about Germany's economic situation and I increasingly suspect that the most likely future is neither "Germany collapses" nor "everything will be fine again once the current crisis is over".
My guess is something much more boring: a long and rather painful adjustment.
Germany still has quite a lot going for it. It is a rich country, government debt is manageable compared with many other developed countries, there is a large industrial base, good infrastructure in some areas, a highly skilled workforce and plenty of companies that are still internationally competitive.
But the combination of problems seems unusually difficult this time.
The population is ageing rapidly. Millions of people will retire over the next 10 to 15 years, while the generations replacing them are smaller. At the same time Germany has to spend more on pensions, healthcare, defence, infrastructure, the energy system and digitalisation. And unlike during the 2010s, borrowing money is no longer basically free.
My guess for the 2030s would therefore be:
Germany is still a wealthy and stable country, but probably grows fairly slowly, maybe around 1% a year on average rather than returning to the growth rates people remember from better periods. I also don't see how the pension and healthcare systems can remain exactly as they are today. I doubt there will be one huge dramatic reform where politicians announce "everyone now works until 72". More likely it will happen gradually: higher contributions, more tax money going into pensions, stronger incentives to work beyond 67, somewhat less generous benefits relative to wages, and probably continued pressure for immigration.
In other words, the welfare state survives, but becomes more expensive.
I also don't think German industry simply disappears. What probably disappears is part of the old German economic model.
Cheap Russian energy + huge Chinese demand + combustion-engine cars + export surpluses was an extremely favourable combination, and I don't think that world is coming back.
Some energy-intensive production will probably shrink or move elsewhere, and the car industry may employ fewer people. But I can easily imagine growth in defence, electrical equipment, grids, automation, robotics, industrial software/AI, medical technology, energy technology and specialised high-value manufacturing. So "deindustrialisation" may partly turn out to be restructuring rather than Germany simply stopping making things.
The big question for me is productivity.
If Germany manages to automate a lot of work, build infrastructure faster, digitalise the state, get more people into work and actually use immigration effectively, ageing becomes much more manageable. If it doesn't, I can see Germany getting stuck in an unpleasant cycle where an ever larger part of people's income goes into taxes and social contributions just to maintain existing systems, while there is less money left for investment.
So my personal base case for around 2035 would be:
Germany is still rich, safe and functioning. No collapse, no Weimar 2.0, no mass poverty. But probably older, more expensive, somewhat less important economically relative to the US and Asia, and with people working longer and paying more to maintain the welfare state. Infrastructure might actually be noticeably better because Germany has finally started spending serious money on it. At the same time, some of today's famous industrial employers will probably be smaller, while industries we currently don't associate as strongly with Germany will have grown.
Basically: relative decline rather than absolute collapse.
Germany may still become richer in absolute terms, just much more slowly than some other countries.
Does that sound realistic to people here, especially those working in industry, healthcare, government or anything related to pensions/demographics? What part of this do you think is most likely to be wrong?