Wiesbaden – Germany’s national deficit grew in 2025, reaching 119.1 billion Euro, according to recent calculations from the Federal Statistical Office (Destatis). This figure represents an increase of 3.9 billion Euro compared to the 115.3 billion Euro recorded in 2024. The deficit, as a percentage of gross domestic product, remained at 2.7% in both 2024 and 2025.
The federal government accounts for the largest portion of the deficit. Of the total 119.1 billion Euro, 79.6 billion Euro is attributable to the federal budget – approximately two-thirds of the overall deficit. However, Germany remains within the parameters of the Maastricht criteria, which allow for deficits up to 3% of GDP.
Bund Makes More, Länder Make Less Debt
The federal government’s financing deficit increased by 18.6 billion Euro compared to the previous year, rising from 60.9 billion Euro in 2024. Municipalities also saw an increase in their deficit, growing by 7.1 billion Euro to 28.1 billion Euro (2024: 21.0 billion Euro).
In contrast, the federal states (Länder) more than halved their financing deficit, reducing it to 9.8 billion Euro from 21.6 billion Euro in 2024. Social insurance also significantly reduced its deficit to 1.7 billion Euro, down from 11.8 billion Euro in 2024. All four sectors of the state – federal, state, municipal, and social insurance – recorded a financing deficit for the year.
Revenue Increases by 5.7 Percent
Despite the increased deficit, state revenues climbed to 2140.2 billion Euro in 2025, a 5.7% or 115.8 billion Euro increase year-over-year. This growth is primarily attributed to a substantial rise in social contributions, which increased by 8.9%.
Current tax revenues also increased, rising by 3.5% to 1031.5 billion Euro. Value-added tax generated 4.0% more revenue, while income and wealth tax revenues increased by 3.4%. Higher revenues from employee savings plans, due to an increased volume of inheritances, also contributed to the surplus. Interest income, however, decreased by 18.0%.
Expenditures Grow Faster Than Revenues
State expenditures also increased significantly in 2025, growing at a faster rate than revenues. They rose by 5.6% or 119.6 billion Euro, reaching a total of 2259.3 billion Euro.
Interest expenditure was 8.1% higher than in the previous year. Monetary social benefits increased by 5.6%, primarily due to higher expenditures for pensions, care allowances, and unemployment benefits. Social benefits in kind increased by 7.3%, particularly due to increased costs for hospital treatment, medication, and care.
Gross investment also increased by 10.3%, attributed to spending from special funds for infrastructure and climate neutrality, as well as rising military expenditure.
Frequently Asked Questions
What was the total state deficit in 2025?
The total state deficit in 2025 was 119.1 billion Euro.
Which sector contributed the most to the overall deficit?
The federal government contributed the most to the overall deficit, accounting for 79.6 billion Euro.
Did the Länder increase or decrease their deficit in 2025?
The Länder decreased their deficit, more than halving it from 21.6 billion Euro in 2024 to 9.8 billion Euro in 2025.
Given these figures, what adjustments to spending or revenue strategies might be considered to address the growing national deficit?
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