US real GDP growth in 2035?
My independent view is that 2035 U.S. real GDP growth is most likely to land in the low-to-mid 2% range, with 2.1% to 2.5% the single most probable outcome. I give some weight to a 2.6% to 3.0% outcome, but I think the market is still too anchored to a low-growth baseline and underprices moderate productivity upside.
Analysis
The strongest anchor is that mainstream forecasters still cluster around trend-like growth, not recession or boom conditions. Recent outlooks from S&P Global and KPMG both imply the U.S. continues to expand at roughly 2% to 2.5% in the next few years, which makes a 2035 outcome in the low 2% range a reasonable central case unless something materially changes in productivity, labor force growth, or capital deepening over the rest of the decade. That said, by 2035 the forecast horizon is long enough that the current near-term baseline should not be treated as a permanent ceiling; even modest compounding of AI-related efficiency gains, infrastructure investment, and diffusion of productivity tools could shift the modal outcome upward relative to today’s consensus.
The main reason to lean above the market on the higher-growth buckets is that 2035 is far enough out for slow-moving structural changes to matter. The recent AI scenario work, while speculative, demonstrates a plausible path to materially stronger GDP growth if adoption becomes broad and monetization is substantial. Even if the extreme double-digit-growth scenarios are unrealistic, the debate itself suggests that 3% growth is not a fantasy case; it is a live scenario if productivity surprise is meaningfully positive and fiscal drag does not overwhelm private-sector gains. Against that, debt dynamics and aging demographics remain persistent headwinds, and there is no strong evidence yet that the U.S. is on a durable 3%+ trend path.
Compared with the current market, the pricing looks too pessimistic on the central 2% to 3% range and too generous to the weaker-growth tail. The market’s 86% implied No price suggests it expects a very narrow set of outcomes, but the evidence supports a broader distribution centered on 2.1% to 2.5% with meaningful mass in 2.6% to 3.0%. I do not think 3%+ should be the base case, but I do think the market underestimates the chance that productivity improvements lift 2035 growth above the low-2% regime.
Arguments
For
- Arguments for Yes: The 2.1% to 2.5% bucket best matches current baseline forecasters and looks like the natural modal outcome if the economy keeps growing near trend.
- Arguments for Yes: Moderate productivity improvement over the rest of the decade could push 2035 growth into the high-2% range without requiring an implausible boom.
Against
- Arguments against Yes: If aging and debt drag intensify, growth could stay stuck in the 1% to 2% range more often than the market expects.
- Arguments against Yes: The stronger AI scenarios remain highly contingent, and adoption may not be broad enough by 2035 to justify a 3% or higher outcome as the base case.
Key drivers
- Mainstream forecasters still point to roughly trend growth in the near term, which makes a low-2% 2035 outcome the default anchor.
- AI-driven productivity gains could lift the long-run growth path by 2035, even if the strongest scenario claims are too optimistic.
Risk factors
- Demographic aging and persistent fiscal pressure could cap the economy at below-trend growth for most of the decade.
- The AI upside may arrive too slowly or diffuse too unevenly to materially move the 2035 annual growth rate.
Scenarios
Best case
AI diffusion, capital spending, and labor productivity all exceed expectations, lifting 2035 growth into the 2.6% to 3.0% range or slightly above.
Most likely
U.S. real GDP growth in 2035 lands in the 2.1% to 2.5% range, with the 2.6% to 3.0% bucket as the main upside competitor.
Worst case
Demographic drag, weak productivity, and fiscal constraints dominate, leaving growth near 0.6% to 2.0% or even worse.
Outcomes
| Outcome | AI | MKT |
|---|---|---|
| 2.1% to 2.5% | 28% | 14% |
| 0.0% or Below | 10% | 12% |
| 2.6% to 3.0% | 24% | 11% |
| 1.6% to 2.0% | 22% | 10% |
| 0.6% to 1.0% | 16% | 8% |
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