Record level: Public debt in Germany rises to 2.662 trillion euros

Federal Government, States and Municipalities at a Glance

The debt of the municipalities and municipal associations rose particularly sharply: according to the information, it grew for the sixth time in a row, this time by 15.4 percent to a total of 197.0 billion euros. In contrast, the debt of social security decreased slightly by 2.5 million to 13 million euros.

Economist Jens Boysen-Hogrefe from the Kiel Institute for the World Economy (IfW) identified increased defense spending as a key driver of this development. "Insbesondere zusätzliche Verteidigungsausgaben haben 2025 die Verschuldung hier angeschoben," he told the Reuters news agency.

Defense Spending as a Driver

Despite initial austerity efforts, according to the expert, debt is likely to "nochmals höher ausfallen" in both the current and coming year. From the IfW's perspective, no short-term trend reversal is in sight.

At the level of the federal states, development varied considerably. The strongest percentage increase in debt per capita compared to the previous year was recorded by Saxony, with an increase of 17.1 percent to 1,736 euros per inhabitant. However, the Free State thus continued to have the second-lowest per capita debt of all states after Bavaria (1,448 euros).

Differences Between the Federal States

In Baden-Württemberg, debt rose by 11.0 percent to 4,295 euros per inhabitant. In Bremen, the federal state with the highest per capita debt, liabilities grew by 9.9 percent to 37,418 euros per inhabitant. This continues to show considerable differences between the states.

The statistics cover the liabilities of all public budgets, including the extra-budgetary funds. It thus represents the comprehensive debt level of the state, which is considered relevant under the Maastricht criteria. Debt per capita is considered an important indicator for classifying the burden in international comparison.

With this increase, a trend that has continued for several years is continuing: Germany's public debt has grown continuously since 2020. In the past two years alone, total debt has increased by several hundred billion euros.

Outlook: Further Rising Debt Expected

The Federal Statistical Office's most recent survey was published on July 29, 2026, and is based on data as of December 31, 2025. It is part of the regular debt statistics published annually.

For the coming years, economists expect further increases given the announced investment programs and persistently high defense spending. The share of interest expenditure in the federal budget is also likely to grow, further limiting fiscal policy room for maneuver.

Debt development thus remains a central topic of German financial policy. The federal government had most recently announced that it would advance budget consolidation while simultaneously providing additional funds for defense and infrastructure.