4,907 euros per capita: Debts of German municipalities are rising faster and faster

The financial situation of many German municipalities is deteriorating. For the second year in a row, record deficits are piling up and debts are growing in all federal states. But new figures from the Federal Statistical Office show that there are significant regional differences.

The debts of municipalities and municipal associations in Germany rose by almost ten percent last year. The increase was 9.9 percent, compared to 6.3 percent in the previous year, as the Federal Statistical Office announced. At the end of 2025, the Federal Office calculated a municipal debt volume of a total of 378.9 billion euros or 4,907 euros per capita.

These are the so-called integrated municipal debts, which include not only the core budgets but also the debts of extra budgets and other public funds, institutions and companies.

As in the previous year, the increase is primarily due to the significant build-up of debt in the municipal core and extra budgets of 15.5 and 14.7 percent respectively. There was a record deficit here in 2025 for the second year in a row, as the Federal Office had already announced in April. According to the information, the debts of investments in funds, institutions and companies grew by 4.5 percent.

Municipalities and municipal associations in Hesse had the highest debt at 6,763 euros per capita. The Saarland municipalities followed with 6,408 euros per capita. According to the Federal Office, the municipalities in Brandenburg (2,733 euros), Saxony (3,338 euros) and Thuringia (3,692 euros) had the lowest debt levels per capita at the end of 2025.

Integrated municipal debt rose in all federal states in 2025, most of all in Lower Saxony (plus 13.3 percent) and in Baden-Württemberg (plus 13.1 percent). The municipalities in Saarland recorded the lowest increase at 2.3 percent and Thuringia at 2.9 percent.