Germany's net borrowing in 2025 came markedly under the figures outlined in its budget plan, reflecting a combination of restrained spending and buoyant revenues, the Finance Ministry revealed on Friday. The country’s first fiscal year budget since the major legislative overhaul loosening long-standing fiscal constraints was devised to facilitate substantial investment in economic revitalization, alongside a mandated increase in defense spending.
Preliminary data indicates that the net borrowing within Germany's core budget was approximately 66.9 billion euros, which is 14.9 billion euros less than the originally budgeted amount. An official from the ministry attributed this reduction roughly equally to underspending and revenue exceeding projections.
Within the core budget, total expenditures amounted to 495.5 billion euros, slightly below the 502.5 billion euros initially forecasted. Conversely, revenues achieved 428.6 billion euros, outpacing the anticipated 420.8 billion euros as per the ministry's data.
Germany's departure from its historical policy of fiscal restraint signals a strategic shift aimed at jump-starting a sluggish economy through public investment. In tandem, an augmented defense budget seeks to ensure military support for Ukraine and align with NATO’s enhanced defense spending targets.
In total, borrowing, which includes allocations from the special infrastructure fund and the special defense fund established in March, reached 102.7 billion euros. This figure remains below the initially projected total borrowing of 143.2 billion euros.