State financing deficit increases to 98.8 billion euros in the first half of 2026

The total deficit currently amounts to 98.8 billion euros. By far the largest share of this was played by the federal government, whose funding gap more than doubled to 72.3 billion euros. But: All levels of government ended the first half of the year with a deficit.

Two percent more income with six percent more expenses

As the Federal Statistical Office reports, there was only around two percent more income in the first half of 2026, but around six percent more expenditure than in the first half of 2025. Two relief measures in particular contributed to the deficit: firstly, the reduction in electricity tax for manufacturing and agriculture and secondly, the reduction in the energy tax on fuels. In addition, there is a collapse in tobacco tax revenue after the increase.

Overall, federal tax revenue fell by 3.1 percent. At the same time, interest costs also rose, among other things: for the general public budget, interest expenses rose by more than a fifth to 31.2 billion euros compared to the same period last year. Investors are demanding significantly higher returns for buying federal bonds - due, among other things, to increased inflation and competition from attractive corporate bonds, for example to finance data centers for artificial intelligence.

Municipalities also lack money

The municipalities were also deeply in the red. At 20.1 billion euros, their financing deficit remained at the record level of the previous year, the highest value for the first half of the year since reunification. The states together recorded a loss of 6.3 billion euros, with individual federal states such as Bavaria and Saxony achieving surpluses.

Social security ended up almost balanced. This was also successful because it was supported by federal loans totaling 10.2 billion euros.

The fuel discount decided in the spring was only received by consumers by a good 80 percent. Now the government has introduced it again and this time, too, hundreds of millions of euros in tax money are threatening to seep away between the refinery and the petrol pump. The government is doing little about it. Read more about this here.