Government spending: Government deficit continues to rise despite record tax revenues

The German government once again spent significantly more money than it earned in 2024. The deficit grew noticeably – despite rising tax revenues.

Last year, the German government spent significantly more money than it earned. According to preliminary calculations by the Federal Statistical Office, the government deficit was 118.8 billion euros - 15 billion euros more than in 2023. Measured against economic output, this results in a deficit ratio of 2.8 percent for 2024, up from 2.5 percent in the previous year.

Despite the economic crisis, Germany is complying with the European debt rule, which allows a budget deficit of a maximum of 3.0 percent. The German state benefited from growing revenues, which exceeded the 2 trillion euro mark for the first time in 2024.

At 62.3 billion euros, the federal government accounted for a good half of the state deficit in 2024. While it was able to reduce the financial gap by 30.5 billion euros compared to the previous year thanks to rising tax revenues, the deficits of the states and municipalities grew significantly. Social insurance also recorded a deficit of 10.6 billion euros in 2024, after a surplus of 9 billion euros the year before. This means that for the first time since 2009, the federal government, states, municipalities and social insurance were all in the red, according to statisticians.

In view of the economic crisis and the pressure to spend more money on defense, a debate has erupted about loosening the debt brake. However, a reform of the debt brake, which is anchored in the Basic Law, requires a two-thirds majority in the Bundestag.

Around half of the population is in favour of easing the debt brake, as an exclusive Insa survey for t-online shows .