Germany’s government debt is expected to reach a record level in 2026.
According to Anadolu Agency, Germany’s federal government plans to set a new record in public debt next year by selling bonds, aiming to modernize infrastructure and strengthen its armed forces.
According to Germany’s Finance Agency, the body responsible for managing federal government borrowing and debt, borrowing is expected to amount to €512 billion, equivalent to more than $600 billion.
Under this plan, the agency intends to offer approximately €318 billion (around $373 billion) in government bonds with maturities of up to 30 years through auctions in capital markets.
In addition, the federal government plans to issue green bonds worth between €16 and €19 billion, equivalent to about $22 billion.
The government is also preparing, for the first time, to issue 20-year bonds next year and has planned new borrowing of €181.5 billion, or roughly $213 billion. This figure represents the second-highest level of borrowing in Germany’s history.
According to the report, total borrowing projected from financial markets next year will reach its highest level ever to secure the necessary resources for investment financing.
In 2023, the German government borrowed €500 billion, or about $586 billion, to address the impacts of the COVID-19 pandemic and the Russia–Ukraine war.
This figure declined to €439 billion (approximately $514.5 billion) in 2024 and has fallen further to €425 billion, or about $498 billion, in the current year.
Despite Germany maintaining the highest possible credit rating, AAA, interest costs for the government are expected to rise due to the high level of borrowing.
/ Tasnim
