Overview
- The statistics office lifted its preliminary estimate from 2.4% of GDP to 2.7%, putting the 2025 financing deficit at €119.1 billion yet still below the EU’s 3% ceiling.
- Roughly two-thirds of the shortfall fell on the federal government at €79.6 billion, municipal deficits deepened to €28.1 billion, and Länder and social insurance gaps narrowed to €9.8 billion and €1.7 billion respectively.
- State revenues rose to €2,140.2 billion, driven by an 8.9% increase in social contributions and a 3.5% rise in tax receipts, while expenditures climbed to €2,259.3 billion, expanding by €119.6 billion and outpacing revenue gains in absolute terms.
- Cost pressures included interest expenses up 8.1%, monetary social benefits up 5.6%, and social in-kind benefits up 7.3%, with gross investment rising 10.3% tied to the new infrastructure and climate fund and higher defense outlays.
- Forecasters expect larger deficits ahead as investment and defense spending ramp up, with IfW projecting about 3.5% of GDP this year and the Bundesbank seeing the ratio rising further through 2027.