Germany: Public Debt Rises
A special energy fund created by Chancellor Olaf Scholz in 2022 was canceled last year, leaving a financial hole of 71.7 billion euros in the German budget
Not very encouraging data regarding the economic situation in Germany continues to come in. After a downward revision of GDP forecasts for 2024, which instead of 1.3% will grow by 0.1% at best this year, a 3.3% increase in government debt was announced. According to the German Statistical Office (Statistisches Bundesamt – Destatis), “German public debt increased by €77.3 billion, or 3.3% year-on-year, in the fourth quarter of 2023 and will rise to a record €2445.5 billion.”
To soften the impact on German public opinion, Destatis analysts clarified that the data includes, among other things, “the deficit of local public transportation companies, included in the total tally from the second quarter of last year.” This means that “without this item, the national debt would have grown less, that is, by 2.9 percent.” The rapid rise in the public deficit was mainly due to a €200 billion increase in the debt of the Energy Sector Economic Stabilization Fund, announced by Chancellor Olaf Scholz in 2022 to allow Germany to counteract the more severe effects of the energy crisis. The deficit of this financial instrument, canceled at the end of last year, increased 1.72 times, from €41.5 billion to €71.7 billion.