Germany’s federal expenditure down 4.0% in H1 ’24

Germany’s federal expenditure amounted to €220.0 billion from January to June 2024, reflecting a 4.0 per cent (€9.2 billion) decrease compared to the same period in 2023.

Consumption spending fell by 3.2 per cent (€6.6 billion), while investment spending dropped by 12.2 per cent (€2.6 billion).

The reduction in consumption spending was primarily due to a 37.0 per cent (€10.3 billion) decline in interest expenditure. However, spending on ongoing grants and subsidies increased by €3.0 billion, and human resources expenditure rose by €1.6 billion. Increased federal subsidies to the general pension insurance system and spending on citizen’s benefits were key contributors.

Conversely, federal payments to the health fund decreased by €1.3 billion. No funds were allocated for a supplementary federal subsidy to the health fund or federal lump-sum contributions to the long-term care insurance system, resulting in further reductions in expenditure.

The drop in investment spending was mainly attributed to the absence of a €6.3 billion loan granted to the IMF’s Resilience and Sustainability Trust in January 2023. Adjusted for this factor, investment spending rose by 25.1 per cent (€3.7 billion), driven by a €3.0 billion allocation to increase Deutsche Bahn AG’s equity and higher investment grants to Autobahn GmbH des Bundes (Germany’s federal highway authority).

Attribution: Germany’s Federal Ministry of Finance monthly report