Expensive energy aid, almost triple interest expenses and the costs of the Germany ticket caused the German state’s deficit to swell in the first three quarters of 2023.
The German government deficit rose in the first nine months of last year. Federal, state, local and social security spending exceeded revenue by 91.5 billion euros, the Federal Statistical Office announced on Thursday. The loss was therefore 25.8 billion euros higher than in the same period last year.
The federal government is responsible for the deficit (minus 75.9 billion euros). Energy aid such as the electricity and gas price cap for private households and companies has an impact here. But the municipalities and municipal associations (minus 11.4 billion euros) and social security (minus 7.2 billion euros) were also in the red. Only the federal states together achieved an increase of 3.1 billion euros.
High key interest rate – high interest expenses
“At the federal government, the trend of sharply increased interest expenses continued,” explained the statisticians. “39.4 billion euros means almost three times more interest payments than in the same period last year.” The reason for this is that the European Central Bank (ECB) raised its key interest rate to 4.5 percent in the fight against high inflation. This also makes financing more expensive for the public sector.
The federal states’ interest burden also rose, by 8.3 percent to 7.7 billion euros. Municipal interest expenses increased by 40.6 percent to 2.1 billion euros. On the other hand, interest income for the federal government (9.3 billion euros), states (1.9 billion euros) and municipalities (1.1 billion euros) has roughly doubled, and for social insurance it has even increased almost eightfold.
Germany ticket changes the calculations
Another reason for the deficit is that the liabilities of transport companies in local public transport (ÖPNV) are now included in the calculation. “The background to this is that around 440 public transport companies receive allocations and subsidies from the federal and state governments to finance the Deutschlandticket, which was introduced on May 1, 2023,” said the statisticians. “As a result, they are no longer financed primarily through their sales revenues and are, according to the concept of financial statistics, classified without exception as extra households.”