Germany’s debt is a constant source of controversy in the federal government. New figures show that the national deficit is declining somewhat. This is also due to the expiring energy price caps.
The German government deficit has fallen slightly. According to preliminary calculations by the Federal Statistical Office, it was 38.1 billion euros in the first half of the year, according to the authority in Wiesbaden. That was 1.3 billion euros less than in the same period last year. According to the statisticians, the expiring energy price caps dampened the increase in government spending. Measured against gross domestic product (GDP), this results in a deficit ratio of 1.8 percent for the first half of the year.
Federal financing deficit decreases
At 24.6 billion euros, the federal government continued to account for the largest share of the overall government financing deficit in the first half of the year, according to the statisticians. However, the federal government’s financing deficit fell significantly by 17.9 billion euros. In contrast, that of the states and municipalities rose sharply to 7.2 billion euros and 6.4 billion euros respectively. Social insurance recorded a financing surplus of 0.2 billion euros, significantly less than a year earlier (9.6 billion euros).
Government revenues rise faster than expenditure
The government’s financing deficit in the first half of the year is the difference between revenue (EUR 973.5 billion) and expenditure (EUR 1,011.6 billion). Revenue rose by 4.7 percent in the first half of the year compared to the same period last year – slightly more than expenditure.
According to statisticians, the energy price caps that expired at the end of 2023 contributed significantly to the decline in subsidies by almost 40 percent in the first half of the year compared to the same period last year. Despite the weak economy, the state’s tax revenues rose by 3.6 percent in the first half of the year compared to the same period last year.
Source: Stern
