In 2025, the total public budget saw an increase in both spending and revenue compared to 2024. According to the Federal Statistical Office (Destatis), expenditures reached approximately 2,208 billion euros, while revenues amounted to around 2,081 billion euros.
When calculating the figures by deducting financial statistics, the core and extra budgets for the federal government, the states, municipalities, and social security funds all registered a financing deficit of 127.3 billion euros. This shortfall increased by 22.9 billion euros compared to 2024, reaching the deficit level seen during the 2022 energy crisis. However, in 2022, only the federal government reported an exceptionally large deficit, which ultimately did not translate into higher debt because less credit was taken out than planned. In 2025, all contributing levels reported deficits. The deficit for municipalities was notably higher than ever before.
For the federal government, the financing gap grew by 34.5 billion euros compared to 2024, while for municipalities, the gap expanded by 7.1 billion euros. Conversely, the states were able to reduce their deficit by 9.5 billion euros, and the social security system also reduced its shortfall by 9.2 billion euros.
The federal government’s revenues remained nearly stable, increasing by only 0.6 percent to 572.6 billion euros, but its expenditures rose by 6.1 percent to 658.0 billion euros, resulting in a deficit of 85.4 billion euros. This reflects the political decision to rely more heavily on borrowing to finance federal spending, leading to “area exceptions” in the federal budget and fully credit-funded extra budgets for the armed forces, infrastructure, and climate protection.
The states’ revenues rose by 5.2 percent to 572.1 billion euros, while expenditures increased by 3.3 percent to 580.8 billion euros, establishing a deficit of 8.7 billion euros. The city-states alone were responsible for nearly three-quarters of this deficit. In contrast, Baden-Württemberg, Hesse, Rhineland-Palatinate, Saxony, and Bavaria posted surpluses, with Bavaria reporting the largest positive balance at 1.5 billion euros.
The high deficits observed in the city-states were mirrored at the municipal level in the state areas. Here, the disparity between revenues and expenditures widened even further than in 2024. A revenue increase of 4.1 percent reached 391.4 billion euros, while expenditure growth of 5.6 percent resulted in 423.3 billion euros, yielding a deficit of 31.9 billion euros.
The social security system experienced an 8.3 percent rise in total revenues, reaching 936.1 billion euros. This included contribution revenues that increased by 9 percent to 771.5 billion euros, partly due to higher supplementary health insurance contributions. Expenditures rose by 7.2 percent to 937.5 billion euros, resulting in a small deficit of 1.3 billion euros.
Statisticians also noted that the new accounting practice for federal securities introduced in 2025 helped cushion the federal government’s spending, which also contributed to a 6.0 billion euro (€14.1%) decrease in interest expenses compared to 2024.
The federal government’s higher spending was intended, among other things, to stabilize the social security system. For instance, the pension insurance received a subsidy 6.5 billion euros higher than in 2024. The federal employment agency received 1.4 billion euros, health insurance got 2.3 billion euros, and long-term care insurance received 0.5 billion euros. Furthermore, the federal government provided a 3 billion euro loan to Deutsche Bahn for railway line investments, while the railway entity received 5.3 billion euros to boost its equity, marking an increase of 3.1 billion euros over 2024. Significant spending on military acquisitions amounted to 39.0 billion euros, representing a 23.4 percent increase for the federal government.
It should be noted that, according to the financing statistics aligned with German budgetary law, military purchases are classified as current operating expenses rather than investments. For traditional capital investments (spending on buildings and acquiring fixed assets), growth was only moderate for municipalities and states (3.5 percent and 2.6 percent, respectively) in 2025, though it rose by 10.5 percent for the federal government. Statistically, the credit-funded funds from the “Special Funds Infrastructure and Climate Protection” established toward the end of 2025, had not yet shown significant effects.
