Germany: Off-Budget Funds Drive Stronger Federal Spending in June

Research evidence excerpt

Germany: Off-Budget Funds Drive Stronger Federal Spending in June

Economics Research

21 July 2026 | 10:20AM CEST

BOTTOM LINE: German federal expenditures in June came in at EUR 44.5bn, slightly Niklas Garnadt

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above our EUR 42.9bn forecast and EUR 7.7bn higher than in June 2025. Stronger niklas.garnadt@gs.com

Goldman Sachs Bank Europe SE

spending was driven by the off-budget funds for military and infrastructure &

climate, which came in notably above our expectations, while spending in the main

budget was slightly below our expectations. With revenues slightly below our

expectations due to weaker tax revenue, the fiscal balance was more negative than

we expected and remains notably wider than we expected at the start of the year.

The fiscal data since the start of the year support our view of a notable fiscal

expansion in 2026, which we expect to provide a fiscal impulse of around 0.6pp.

KEY NUMBERS:

Expenditures in the Main Budget (June): EUR 37.8bn (vs. GS expected EUR 38.3bn

and 2025 Realized EUR 35.8bn)

Expenditures (implied) in the Military Fund (June): EUR 2.0bn (vs. GS expected EUR

1.0bn and 2025 Realized EUR 1.0bn)

Expenditures (implied) in the Infrastructure and Climate Fund (June): EUR 4.6bn (vs.

GS expected EUR 3.6bn and 2025 Realized EUR 0bn)

MAIN POINTS:

1. German fiscal data for June were slightly above our expectation. Overall spending

across the main budget and the off-budget funds for the military and for

infrastructure & climate came in at EUR 44.5bn, above our expectation of EUR

42.9bn and EUR 7.7bn higher than spending in June 2025.

2. Spending stood at EUR 37.8bn in the main budget in June, about EUR 0.5bn below

our expectation but EUR 2.0bn above June last year. The downside surprise was due