Germany Faces €171 Billion Budget Deficit by 2029

Germany has a deficit in the draft federal budget for 2026. According to BILD data, the deficit by 2029 amounts to 171 billion euros, 27 billion more than was assumed just five weeks ago. At that time, Finance Minister Lars Klingbeil had mentioned a deficit of 144 billion euros. The increase is related to new expenses, including compensations to the federal states and a revision of interest rates.

The Ministry of Finance admits that the deficit is very large. The main problem is to reduce it as quickly as possible. In 2027 alone, the government must save 34 billion euros, in 2028 - 63 billion, and in 2029 - 74 billion.

The authorities have already announced the first measures. Specifically, it is planned to cut personnel costs of ministries by 2% annually, administrative costs by 10%, as well as reduce subsidies and development programs. However, the ministry admits that "they will not reach the goal this way."

The government has high hopes for the social security reform commission. It is expected that experts will propose specific changes in the areas of healthcare, the pension system, care, and other social spending.