Germany public budget deficit reaches 98.8 billion euros

Germany's public budget deficit reached approximately 98.8 billion euros in the first half of the year, according to data from the Federal Statistical Office (Destatis). This represents a significant increase of 40.3 billion euros compared to the 58.5 billion euro deficit recorded during the same period last year.

The federal government accounted for the largest portion of the deficit at 72.3 billion euros. While federal revenues fell by 5 percent to 253.1 billion euros, expenditures rose by 9.8 percent to 325.5 billion euros, driven by fuel subsidies, tax incentives, and rapidly increasing interest payments.

Municipalities and municipal associations faced severe financial pressure, recording a deficit of 20.1 billion euros. This marks the highest first-half budget deficit for municipalities since German reunification in 1990. Additionally, total public interest payments surged by 21.2 percent year-on-year, climbing to 31.2 billion euros due to high inflation and increased demand from investors for higher yields on government bonds.