Rising public debt in Germany is expected to increase considerably in the year 2024
In 2024, Germany's overall public debt rose by 2.6%, reaching a staggering 2.51 trillion euros. This increase is primarily attributed to mounting fiscal pressures at all government levels, as the country grapples with weak economic growth and slowing public revenues [1][2].
The distribution of this debt across different levels of government paints a complex picture. The federal government holds the largest share of debt, with liabilities increasing to 1.73 trillion euros. State governments also saw an increase in debt, but it is the municipalities and local governments that experienced especially sharp debt increases, indicating heightened fiscal strain at the local level [1][2].
This rise in debt is compounded by a projected funding gap of 172 billion euros between 2027 and 2029 in the federal budget, signaling ongoing fiscal challenges. This gap is about 30 billion euros higher than earlier estimates, largely due to tax cut plans and the associated compensation promises to subnational governments [1][2].
Among the area states, Saarland had the highest per capita debt with a value of 13,697 euros, followed closely by Schleswig-Holstein with 10,903 euros. However, Rhineland-Palatinate, which was previously among the top 3 most indebted municipalities, has seen some relief due to measures within the state program "Partnership for the Debt Relief of Municipalities in Rhineland-Palatinate" (PEK-RP) [1].
Municipalities in North Rhine-Westphalia hold the highest per capita debt at 3,577 euros, while municipalities in Brandenburg have the lowest at 581 euros. The city-states of Bremen, Hamburg, and Berlin have the highest per capita debts, with Bremen leading the pack at 33,934 euros, followed by Hamburg at 17,571 euros and Berlin at 18,173 euros [1].
On the other hand, the lowest per capita debts among the area states are found in Bavaria with 1,353 euros and Saxony with 1,482 euros. The municipal per capita debt increased to 2,206 euros in 2024, a rise from 2,005 euros in the previous year [1].
Social security was in debt by 0.12 euros per capita at the end of 2024, a decrease from 0.48 euros in 2023. The total debt of social security decreased by 73.9 percent to 10 million euros [1].
The non-public sector, which includes credit institutions, the rest of the domestic sector, and the foreign sector, including private companies at home and abroad, was not immune to this trend. The debt of municipalities and associations of municipalities increased by 10.3 percent (15.9 billion euros) to a total of 170.5 billion euros [1].
In conclusion, Germany's public debt is on the rise, with the federal government, state governments, and municipalities all contributing to the increase. The federal government's role includes compensating states and municipalities for revenue shortfalls caused by federal tax changes, further affecting debt at all levels [1][2].
[1] Source: Statistisches Bundesamt (2025). Public Finances in Germany, 2024. [2] Source: Bundesministerium der Finanzen (2025). Budget Report, 2024-2029.
The increase in Germany's public debt in 2024 is a concern for the business and finance sectors, as the country's overall debt reached 2.51 trillion euros, with municipalities and local governments experiencing especially sharp debt increases. This rise in debt is linked to the federal government's role in compensating states and municipalities for revenue shortfalls caused by federal tax changes, leading to ongoing fiscal challenges.
In the midst of this challenge, the non-public sector, including credit institutions and private companies at home and abroad, has also seen an increase in debt, with municipalities and associations of municipalities accounting for a significant portion of this total.
