Germany’s public debt climbs to $3.1T on higher spending

Germany’s public debt rose by €151 billion ($176.1 billion) to €2.66 trillion ($3.1 trillion) at the end of last year, driven in part by higher defense spending and infrastructure investment, according to preliminary data released Thursday.

The Federal Statistical Office, or Destatis, said total public sector debt -- covering the federal government, states, municipalities and social security funds -- increased 6% year-on-year.

Compared with the end of 2024, the debt stock rose by €151 billion to €2.66 trillion. In the final quarter of 2025 alone, debt increased by €50.8 billion, or 1.9%, from the previous quarter.

Federal government debt rose by €32.2 billion in the last quarter to €1.84 trillion.

Destatis said the increase was driven largely by “special funds,” including those set aside for the German armed forces, or Bundeswehr, and infrastructure projects. Debt linked to the Bundeswehr fund rose 30% to €43 billion, while debt tied to the Infrastructure and Climate Neutrality Special Fund (SVIK) reached €24.3 billion.

Debt held by Germany’s states increased by €8.7 billion to €624.6 billion. Hamburg recorded the largest rise at 7.8%, followed by Bremen and Bavaria, while Mecklenburg-Western Pomerania reduced its debt by 3.9%.

Debt at municipalities and municipal associations rose by €9.8 billion, or 5.3%, to €196.3 billion. Experts said local authorities, having exhausted reserves, are increasingly relying on new borrowing to maintain public services.