Government investments in 2025 rose as sharply as they have in 25 years – Bundeswehr drives the increase

The increase was attributable to higher spending on military weapons systems and other Bundeswehr procurement, the Federal Office said. Government equipment investment therefore grew particularly strongly: Government equipment investment, which also includes weapons systems, rose by 47.7 percent.

Bundeswehr as the main driver

However, government construction investment grew at a much weaker pace than in previous years, up 2 percent compared with 2024. The government's share of construction investment was the largest, at a good 17 percent. There were also higher investments in research and development as well as software.

Sebastian Dullien, scientific director of the Institute for Macroeconomics and Economic Research at the Hans Böckler Foundation, sees this as a positive development. The additional borrowing opportunities for defense and investment through special funds are having an effect. At the same time, he said: „Die Modernisierung des Landes kommt voran."

Dullien: Modernization is progressing

At the same time, Dullien pointed to another point: „Die Bundesregierung müsse darauf achten, dass die zusätzliche Verschuldung aus den Sondervermögen wirklich in neue Investitionen fließe." There was certainly a need for action here. Estimates indicate that a considerable share of the funds was used for other purposes – such as the reduction of VAT in the catering sector, the "Mütterrente" (mothers' pension) or the reduction in corporate tax.

Germany in European comparison

In European comparison, Germany, with its government investment ratio of 3.3 percent of GDP, remains in the middle of the pack. The ratio was higher than in Germany in the Netherlands (3.5 percent), Italy (3.8 percent), Austria (3.9 percent), France (4.5 percent) and Poland (5.4 percent). Estonia stood at the top of the 27 EU member states with a share of 7.6 percent.

In total, 147.5 billion euros flowed into government investments in 2025. Gross investments amounted to 147.5 billion euros in 2025. This leaves open the question of the extent to which the increase flows permanently into civilian modernization – or whether a growing share is accounted for by defense spending.

This news was broadcast on June 29, 2026 on the Deutschlandfunk program. The report is based on information provided by the Federal Statistical Office in Wiesbaden and was distributed via the dpa news channel.