Interest expenses are a burden on the federal government
Government deficit falls below record again
April 5, 2024, 12:23 p.m
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Even in Corona times, the national deficit exceeds the 100 billion mark. The German state has now recovered from this. But: For the first time in decades, the municipalities are also recording a deficit, and the federal government also has to spend more money on interest.
The government deficit fell by 35.4 billion euros in 2023 compared to the previous year. According to the Federal Statistical Office, expenditure in the core and extra budgets of the federal, state, local and social security budgets was 91.9 billion euros higher than income. The deficit was therefore below 100 billion euros for the first time since the record level of 2020.
The overall public budget spent around 4.1 percent more and received 6.4 percent more than in 2022, it said. A strong increase in social security contributions of 6.3 percent and tax revenue of 2.2 percent contributed to this.
According to statisticians, the federal government recorded the largest deficit at 87.6 billion euros. For the first time in years, the municipalities also recorded a deficit, amounting to 6.8 billion euros. The states’ income and expenditure are almost balanced. Social security has a small surplus. This is 2.7 billion euros.
According to the information, the federal government in particular had to spend significantly more on interest. Interest expenses rose by 29.3 billion to 46.7 billion euros and are therefore more than two and a half times the previous year’s expenses. At 13.7 billion euros, the federal government also received around twice as much interest from other areas as in 2022.
The federal government spent almost 14 percent less on ongoing allocations, grants and debt service assistance, especially to the states, than in 2022. This is reflected in the decline in Corona aid for companies and in allocations to the health fund, it said.
In contrast, the federal government spent 18.2 percent more on grants to other areas. The main focus is on energy aid such as the electricity and gas price brake.