Germany: Government Draft Budget Plans With Higher Deficits for 2027 and Beyond

研报英文原文证据摘录

Germany: Government Draft Budget Plans With Higher Deficits for 2027 and Beyond

Economics Research

6 July 2026 | 4:18PM CEST

Germany: Government Draft Budget Plans With Higher Deficits for 2027

and Beyond

BOTTOM LINE: The German government passed the draft budget for 2027 and the Niklas Garnadt

+49(69)7532-1537 |

medium-term fiscal plan until 2030 in today’s (July 6) cabinet meeting. The niklas.garnadt@gs.com

Goldman Sachs Bank Europe SE

government’s plan includes net borrowing of EUR 203.7bn and a EUR 6.8bn

withdrawal from the budget reserve for a total net funding need of EUR 210.5bn

(4.4% of GDP). The total funding need is thus EUR 14bn (0.3% if GDP) higher than

indicated by April’s headline numbers and EUR 38bn (0.8% of GDP) higher than

indicated by last year’s medium-term fiscal plan. Projected net borrowing for 2028

to 2030 was also revised up notably, as the government now plans to start repaying

the extra debt incurred during the pandemic only from 2033 onwards (vs. 2028

previously), increasing the deficit limit by EUR 12.4bn annually. We raise our deficit

projections for 2027 onwards by about 0.2pp per year.

MAIN POINTS:

1. The German government today passed the draft budget for 2027 and the

medium-term fiscal plan until 2030 in today’s (July 6) cabinet meeting. Compared to

2026 it plans to increase federal spending by about 5% to EUR 640bn (13.4% of

GDP) across the main budget (EUR 555.4bn) and the off-budget funds for defence

(EUR 30bn) and infrastructure & climate (EUR 54.9bn). Spending in the infrastructure

and climate fund is slightly smaller than originally planned, as EUR 4bn of

infrastructure spending was designated as defence related and moved to the main

budget. Defence spending across the main budget and the off-budget fund for