According to preliminary data released by the German Federal Statistical Office (Destatis), Germany’s general government budget deficit, covering the federal government, states, municipalities and social security funds, increased by EUR36.6 billion in January-June 2026 compared with the same period last year.
With the budget deficit-to-GDP ratio reaching 3.1%, Germany exceeded the 3% budget deficit limit stipulated by the Maastricht Treaty under the European Union’s Stability and Growth Pact.
Public spending rises 6.1%
In the first half of the year, Germany’s total public revenues increased 2.8% year on year to EUR1.0732 trillion. Public spending, meanwhile, increased 6.1% to EUR1.1445 trillion.
The federal government recorded the largest budget deficit at EUR48.1 billion. The federal-level deficit increased by EUR29 billion compared with the same period last year. The increase was driven by higher defense spending, as well as additional investments and subsidies financed through special funds.
The combined budget deficit of the federal states increased by EUR3.5 billion to €6.5 billion, while municipalities’ deficit decreased by EUR1.5 billion to EUR14.8 billion.
Social security funds, which recorded a EUR3.8 billion surplus in the first half of last year, posted a EUR1.8 billion deficit in the first half of 2026, mainly due to higher spending on health and long-term care insurance.
Interest payments rise to EUR27.3 billion
Germany’s interest payments increased 11.6% year on year to EUR27.3 billion in the first half of the year.
The yield on Germany’s 10-year government bonds reached 3.3% last week, its highest level in 15 years.
Source: Anadolu Agency (AA)
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