German Infrastructure Fund Falls Short of Spending and Investment Targets in 2023
Overview of Fund Performance and Economic Impact
Background and Creation of the Fund
May 31 (Reuters) - Germany's special fund for infrastructure has so far failed to reach its targets on how much to disburse, a 383-page finance ministry report due to be published this week shows, newspaper Handelsblatt said on Sunday.
• The €500 billion ($583 billion) fund was created last year as a way to revive the German economy but it has taken time to take effect. Economists and business groups have warned the fund alone cannot deliver sustainable growth.
Reporting and Parliamentary Review
• The report is due to be sent to the lower house of parliament's budget committee and then made public early this week.
• A finance ministry spokesperson declined to comment.
Spending and Milestone Achievement
Disbursement Shortfalls
• Last year, the fund was supposed to disburse €37.4 billion but instead spent only 24 billion euros, Handelsblatt reported. Of 109 planned "milestones" for 2026, it had achieved only 26 by the end of May, it added.
Progress and Effectiveness Indicators
• The ministry has introduced a "progress and effectiveness indicator" to assess the extent to which investment projects are meeting their targets, the newspaper said, adding that the average across the fund is 54%.
Sector Performance Breakdown
• The highest figure by sector was 90% each for investments in hospitals and sports facilities, followed by 66% for housing construction, 57% for digitization, 52% for transportation and 45% for energy infrastructure, it said. In education and childcare infrastructure, there was no measurable progress.
Economic Impact and Future Outlook
• A separate finance ministry document seen by Reuters said the fund's investments were boosting German gross domestic product by half a percentage point, a figure that Handelsblatt also cited from the report. The document also said the pace of implementation needs to be increased.
($1 = 0.8577 euro)
(Reporting by Joern Poltz in MunichWriting by Francois MurphyEditing by Matthew Lewis)
