Published by Global Banking & Finance Review®
Posted on July 11, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleScope reports German debt will rise to 74% of GDP by 2030 due to increased spending on defence and infrastructure, necessitating fiscal reforms.
BERLIN (Reuters) -Germany's debt is expected to increase to 74% of gross domestic product by 2030 from 62.5% last year due to the increase in spending on defence and infrastructure, according to a report from the European rating agency Scope seen by Reuters on Friday.
Germany's parliament approved plans for a massive spending surge in March, shrugging off decades of fiscal conservatism.
"Despite rising borrowing, the pressure to consolidate the government's core budget will increase over time," said Scope analyst Julian Zimmermann.
Growing expenditure on interest payments and social security including pensions and health care will reduce fiscal flexibility, he said.
The proportion of available funds in the federal budget is therefore likely to fall from 24% to just 3% by 2035, according to Scope.
In order to maintain room for maneuver, structural reforms - for example in pensions and the labour market - are necessary, the report said.
An infrastructure fund of 500 billion euros that is also part of the spending surge could raise the growth potential of Europe's largest economy to 1% from the current 0.7%, Scope said.
In comparison, the growth effect of the additional defence spending will be moderate, Scope said, calculating that for every euro invested by the state in defence, 50 cents will reach the domestic economy as a growth stimulus.
(Reporting by Rene Wagner and Maria Martinez, Editing by Friederike Heine)
Germany's debt is expected to rise to 74% of GDP by 2030, up from 62.5% last year.
The increase in spending on defense and infrastructure is primarily driving the rise in Germany's debt levels.
Growing expenditure on interest payments and social security will reduce fiscal flexibility, with available federal budget funds likely falling from 24% to just 3% by 2035.
Structural reforms in areas such as pensions and the labor market are necessary to maintain fiscal maneuverability.
The proposed infrastructure fund of 500 billion euros could potentially raise Germany's growth rate to 1% from the current 0.7%.
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