Germany’s public-sector financing deficit widened to €98.8 billion in the first half of 2026, up sharply from €58.5 billion a year earlier.
Federal statistics office Destatis said public revenue rose by about 2% from the first half of 2025 while spending increased by roughly 6%. Total revenue reached €1.012 trillion against €1.111 trillion of expenditure.
Federal government drove most of the increase
The federal government’s deficit more than doubled to €72.3 billion from €30 billion in the same period last year. Federal expenditure rose 9.8%, while revenue fell 5%.
Destatis linked part of the revenue decline to energy-tax relief measures, including lower electricity taxes for industry and agriculture and temporary reductions in fuel taxation. Interest expenses also increased.
Municipal finances remain under pressure
German municipalities recorded a €20.1 billion deficit, matching the record level seen in the first half of 2025. State governments together posted a €6.3 billion deficit, although several individual states reported surpluses.
The data come from Germany’s quarterly cash statistics and are not identical to the Maastricht deficit measure used under European Union fiscal rules. Destatis said methodological differences mean the figures should not be treated as a direct reading of Germany’s EU deficit ratio.
Sources: Destatis press release No. 351, Oct. 2, 2026; Reuters and European fiscal reporting.
