Germany’s overall public-sector budget deficit, covering the federal government, federal states, municipalities and social security funds, reached €98.8 billion in the first half of 2026.

The deficit was €40.3 billion higher than in the same period last year.

According to Germany’s Federal Statistical Office (Destatis), public-sector revenue rose by 2% year-on-year to €1.0118 trillion between January and June, while expenditure increased by 6% to €1.1106 trillion.

The largest deficit was recorded at the federal level, at €72.3 billion. Federal government expenditure rose by 9.8% to €325.5 billion, while revenue declined by 5% to €253.1 billion.

Municipalities recorded a budget deficit of €20.1 billion, the highest figure for the first half of a year since the reunification of East and West Germany in 1990.

The government’s interest payments also increased significantly, rising 21.2% year-on-year to €31.2 billion.

The report attributed the continued high level of the budget deficit to economic stagnation, as well as increased investment and defense spending.