We shouldn’t let the upbeat projections for the next few years lull us into a false sense of security. Germany’s long-run outlook, like Japan’s, is also being clouded by demographic developments and their negative implications for potential growth. So if we want to keep our economies wealthy, we will need to address the root causes of declining prosperity and implement growth-enhancing measures.
The huge influx of refugees to Germany, which peaked last autumn, may dampen the impact of demographics to some extent, as refugees generally tend to be younger than the population at large. However, to limit the burden surrounding the current wave of migration, it is the precondition that the new arrivals integrate smoothly into the labour market. 3.