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The Federal Ministry of Finance said in its September 2026 monthly report that the federal budget recorded a deficit of 67.7 billion euros from January through August. Federal expenditure totaled 334 billion euros during the period, an increase of 4.7 percent from the previous year, while revenues declined 2.5 percent to 266.3 billion euros. Tax revenues fell 3.2 percent to 239.6 billion euros, the ministry figures show, contributing to the widened gap compared with the 65.4 billion euro deficit in the same period of 2025.
According to the ministry report, consumption spending grew 4.5 percent and investment outlays rose 6.7 percent in the eight-month span. The full-year target deficit stands at 98.1 billion euros, with net borrowing through August amounting to 19.3 billion euros after accounting for cash resources and other financing items. Revenue and expenditure flows vary significantly across months, limiting the predictive value of interim results for the annual outcome, the ministry noted.
Germany’s general government posted a 71.3 billion euro deficit in the first half of 2026, an increase of 36.6 billion euros from the year-earlier period, the Federal Statistical Office reported in late August. Central government drove most of that shortfall with a 48.1 billion euro deficit, up 29 billion euros year on year, while state governments saw their combined deficit widen to 6.5 billion euros. The general government deficit ratio reached 3.1 percent of gross domestic product for the first six months.
Bundesbank projections place the full-year general government deficit ratio near 4 percent in 2026, up from 2.7 percent in 2025, largely on higher defense and investment spending after the 2025 reform of the debt brake rule. IMF staff forecasts align with an overall deficit of about 3.4 percent of GDP for the year. These outlooks incorporate additional expenditures from special funds for infrastructure, climate neutrality and the armed forces.
The Finance Ministry stated that the 2026 budget includes a substantial rise in investment spending compared with 2025 as part of a broader investment offensive. Special funds have contributed to elevated borrowing levels, with the Infrastructure and Climate Neutrality Fund and Bundeswehr fund featuring prominently in the figures. The ministry highlighted that such measures respond to needs in security and economic modernization.
Further ministry data indicated that energy tax receipts continued to reflect the impact of earlier relief measures, with a 13.5 percent decline in August alone. Overall tax revenues for the first eight months showed only modest growth when combining federal and state levels, according to separate finance ministry tallies. Economists anticipate additional widening of the deficit in remaining months as planned expenditures accelerate.
