In 2025, the total public budget saw expenses increase by 6.0 percent and revenues rise by 5.2 percent compared to 2024. According to the Federal Statistical Office (Destatis) on Tuesday, revenues amounted to approximately 2,081 billion euros against expenditures of about 2,208 billion euros.
When accounting for financial statistics, the core and extra budgets for the federal government, states, municipalities, and social security recorded a financing deficit of 127.3 billion euros. This deficit was 22.9 billion euros higher than in 2024, reaching the level seen during the energy crisis year of 2022. However, in 2022, only the federal government reported an exceptionally large deficit, which ultimately did not translate into increased debt because fewer loans were taken out than planned. In 2025, all levels reported deficits. The deficit for municipalities was the largest ever recorded.
Compared to 2024, the financing gap for the federal government widened by 34.5 billion euros, while the gap for municipalities increased by 7.1 billion euros. In contrast, the states managed to reduce their deficit by 9.5 billion euros, and social security reduced its deficit by 9.2 billion euros.
For the federal government, revenues remained nearly unchanged (+0.6 percent to 572.6 billion euros), but expenditures rose by 6.1 percent to 658.0 billion euros. This resulted in a deficit of 85.4 billion euros. This figure reflects the political decision to rely more on borrowing to finance federal spending, leading to “area exemptions” in the federal budget and entirely loan-funded extra budgets for the armed forces, infrastructure, and climate protection.
State revenues increased by 5.2 percent to 572.1 billion euros, while expenditures rose by 3.3 percent to 580.8 billion euros, yielding a deficit of 8.7 billion euros. The city-states alone accounted for nearly three-quarters of this deficit. Conversely, Baden-Württemberg, Hesse, Rhineland-Palatinate, Saxony, and Bavaria recorded surpluses, with Bavaria reporting the highest positive balance of 1.5 billion euros.
The high deficits in the city-states were mirrored by the gap between revenues and expenditures at the municipal level in the larger states, which widened even further than in 2024. A revenue increase of 4.1 percent to 391.4 billion euros coupled with an expenditure increase of 5.6 percent to 423.3 billion euros resulted in a deficit of 31.9 billion euros.
Overall social security revenues rose by 8.3 percent to 936.1 billion euros, including contribution revenues up 9 percent to 771.5 billion euros (partially due to increased health insurance supplementary contributions). Expenditures climbed by 7.2 percent to 937.5 billion euros, resulting in a minor deficit of 1.3 billion euros.
Statisticians noted that the introduction of a recording practice for federal securities in 2025 helped curb federal spending. Consequently, interest expenditures also dropped by 6.0 billion euros compared to 2024 (+14.1 percent).
The federal government’s increased spending aimed in part to stabilize social security. For instance, the pension insurance received a subsidy 6.5 billion euros higher than in 2024. Other bodies benefited from loans: the Federal Employment Agency received 1.4 billion euros, health insurance received 2.3 billion euros, and care insurance received 0.5 billion euros. To finance railway upgrades, the federal government provided the Deutsche Bahn with a 3 billion euro loan. For the same purpose, the railway received 5.3 billion euros to increase its equity, which was 3.1 billion euros more than in 2024. Furthermore, defense procurement expenditures rose: the federal government spent 39.0 billion euros on this, an increase of 23.4 percent.
The statistical office clarified that, according to German accounting law, military procurements are recorded as current operating expenses, not investments. Typical capital investments (spending on buildings and acquiring tangible assets) rose only moderately in municipalities and states in 2025 (+3.5 percent and 2.6 percent respectively), but they increased by 10.5 percent at the federal level. Statistically, the loan-funded funds from the “Special Fund Infrastructure and Climate Protection” established near the end of 2025, had not yet shown significant effects.