Budget

On 10 June 2026, the federal government submitted to the National Council a two-year budget for 2027 and 2028, a federal medium-term expenditure framework through 2031, and a comprehensive Budget Accompanying Act. The budgetary environment is challenging due to rising interest costs and demographic trends. Newly planned policy initiatives further complicate efforts to reduce the budget deficit. In 2027, expenditures of 128.2 billion euros and revenues of 112.7 billion euros are projected. This results in a net financing requirement in the federal budget of 15.5 billion euros. In 2028, it is expected to decline further to 13.2 billion euros. The general government budget deficit is projected to fall to 3.0 % of gross domestic product (GDP) in 2028 and to decline further to 2.9 % of GDP by 2031. The proposed budget plan is consistent with European fiscal rules. However, under the current macroeconomic assumptions, the measures planned so far are insufficient to achieve the target of reducing the deficit to no more than 3.0 % of GDP by 2028.

The analysis is available only in German.

Payments in 2025 were 0.8 billion euros or 0.6 % higher than in the previous year. The increase was mainly due to higher payments for pensions, personnel, and unemployment insurance benefits. The consolidation measures implemented and the phasing-out of crisis measures dampened payment growth. Payments were 1.8 billion euros below the 2025 budget. Receipts were 5.5 billion euros or 5.4 % higher than in the previous year. The increase was primarily driven by tax receipts and receipts from the Recovery and Resilience Facility. The main declines were in receipts from dividends and federal cash management operations. Receipts were 2.0 billion euros above the 2025 budget. The difference between receipts and payments resulted in a net financing requirement of 14.4 billion euros in 2025.

The analysis is available only in German.

The report on effective action to correct the excessive deficit submitted by the Federal Ministry of Finance (BMF) contains an updated general government budget forecast for 2025 and 2026. As in its spring forecast, the BMF expects a general government budget deficit of 4.5 % of GDP in 2025 and 4.2 % in 2026. The general government debt-to-GDP ratio is now projected at 81.7 % and 83.1 %, respectively — around 3 percentage points lower in each year, mainly due to the revision of nominal GDP. The BMF’s projected growth in net expenditure is below the permitted ceiling in both years. Therefore, if the planned figures are met, compliance with the EU fiscal rules can be ensured.

The analysis is available only in German.