As of the end of the fourth quarter of 2025, the total public budget debt was 2,661.5 billion euros for the non-public sector. According to the Federal Statistical Office (Destatis), preliminary figures released on Thursday show that this public debt increased by 1.9 percent, or 50.8 billion euros, compared to the third quarter of 2025. Furthermore, compared to the end of the year 2024, the public debt level at the close of the fourth quarter of 2025 saw an increase of 6.0 percent, amounting to 151.0 billion euros.
The public total budget encompasses the finances of the federal government, states, municipalities, local associations, and social security, including all extra-budgetary items. The non-public sector includes credit institutions as well as other domestic and foreign areas, such as private companies both at home and abroad.
Federal debt rose by 32.2 billion euros (+1.8 percent) compared to the previous quarter, reaching 1,840.6 billion euros by the end of the fourth quarter of 2025. This increase was mainly driven by accruing debts in special assets: the “Armed Forces Special Fund” increased its debt by 29.4 percent, or 9.8 billion euros, from the previous quarter to 43.0 billion euros. Additionally, the newly established “Infrastructure and Climate Neutrality Special Fund” (SVIK), dating back to January 1, 2025, took on debt for the first time in October 2025, with its debt standing at 24.3 billion euros by the end of the fourth quarter of 2025.
At the end of the fourth quarter of 2025, the states were indebted by 624.6 billion euros, marking an increase of 8.7 billion euros (+1.4 percent) from the previous quarter. Hamburg experienced the strongest percentage increase in debt at +7.8 percent, followed by Bremen (+3.9 percent) and Bavaria (+3.2 percent). For Hamburg, the rise in the debt level is primarily attributed to the incorporation of liabilities from certain other funds, institutions, and companies (sFEU) into the debt total with the formation of the consortium-financing extra budget, the “Hamburg Finance Service Agency” (FSA). Previously, these entities had financed themselves on the financial market. In Bremen, cash loans increased due to the provision of cash collateral for investments. In Bavaria, the increase is due to refinancing of previously expired loans.
Only three states saw a reduction in debt compared to the preceding quarter. Mecklenburg-Vorpommern experienced the steepest percentage decline at -3.9 percent, while Thuringia and Saxony-Anhalt saw slight reductions of -0.1 percent each.
Debt also increased for municipalities and local associations by the end of the fourth quarter of 2025 compared to the previous quarter. The debt rose by 9.8 billion euros to 196.3 billion euros, showing the largest percentage increase among the individual layers of the total public budget at +5.3 percent.
The municipalities and local associations in Lower Saxony registered the highest percentage increase compared to the previous quarter at +9.3 percent, followed by municipalities in Baden-Württemberg (+9.2 percent) and Saxony (+8.8 percent). These increases are mostly due to the depletion of local reserve funds, forcing municipalities to take on new debt to fulfill their mandated duties.
A decrease in municipal debt was recorded in Thuringia (-1.7 percent), and for the first time in 2025, in Saarland (-0.9 percent). In the case of Saarland’s municipalities, this decline is partly attributed to the state taking over the debt of municipalities and local associations again under the “Saarland Pact”.
Meanwhile, social security debt decreased by 2.5 percent or 0.2 million euros in the fourth quarter of 2025 compared to the previous quarter, settling at 9.4 million euros.
