Germany’s net borrowing for 2025 was significantly below budget estimates, according to the finance ministry. The outperformance was attributed to lower-than-expected spending and higher-than-expected revenues. This was Germany’s first annual budget since fiscal reforms were implemented in March of last year, which aimed to stimulate the economy and increase defence spending.
Preliminary figures indicate that borrowing totalled 66.9 billion euros in the core budget, 14.9 billion euros less than initially budgeted. Total spending in the core budget reached 495.5 billion euros, compared to the planned 502.5 billion euros, while revenues exceeded expectations at 428.6 billion euros against the anticipated 420.8 billion euros. Total borrowing, including funds from the special infrastructure and defence funds, amounted to 102.7 billion euros, falling short of the originally planned 142.3 billion euros.
Total investments reached a record level of 86.8 billion euros in 2025, with 55.4 billion euros coming from the core budget and the remainder from special funds. The ministry noted a 12.3 billion euro increase in investment spending compared to 2024, representing a 17% rise. However, total investments were still below the budgeted 115.6 billion euros. German Finance Minister Lars Klingbeil stated that investment funds had not been fully utilised in 2025 and urged for improvements in 2026. Germany’s parliament approved a 500-billion euro special fund for infrastructure in March, but only 24 billion euros had been invested by the end of 2025.
To improve transparency regarding the utilisation of the infrastructure fund, the finance ministry launched an “investment clock” on its website. This resource provides monthly updates on the disbursement of funds. Germany is working to revive its economy through public investments, and has committed to increased defence spending to support Ukraine and meet NATO targets.
