Germany reported a fiscal deficit of €28.9 billion in the first half of 2025, according to preliminary figures from the country’s federal statistics office (Destatis).
Compared to the same period in 2024, the federal deficit fell by €19.4 billion. Measured against GDP (at current prices), this means that Germany had a deficit ratio of 1.3% in the first half of 2025.
Government deficit
Germany’s federal government accounted for the largest share of the deficit, the data showed, at €16.7 billion, however this was €10.5 billion lower than a year earlier.
The federal states’ budget deficit stood at €1.3 billion in the first half, a decrease of €10.3 billion compared to the same period a year ago. At the same time, however, municipalities posted a larger deficit this year, of €14.2 billion, compared to €9.5 billion a year earlier.
Elsewhere, social security funds recorded a surplus of €3.3 billion in the first half of 2025, compared with a flat (€0.0 billion) performance in the corresponding period a year ago.
Tax revenues rise
Government revenue rose by 6.5% to €1,042 billion, outpacing expenditure growth of 4.3% to €1,070.9 billion. Tax revenues increased by 5.1%, with VAT receipts up 6.9% and income tax up 4.6%.
Social contributions rose, by 8.9%, boosted by higher health and long-term care insurance rates.
Social benefits such as pensions and unemployment benefits drove an increase in spending, rising by €20.3 billion (+5.8%) in the first half of the year, while medical, hospital and social assistance benefits were up €13.5 billion (+7.1%).
The results, defined under the European System of Accounts (ESA 2010), form the basis for monitoring EU member states’ compliance with the Stability and Growth Pact (Maastricht criteria) and are not identical to the general government budget balance as defined in financial statistics. As such, Destatis noted that only ‘limited conclusions’ can be drawn about the full-year outcome, based on the half-year data. Read more here.
