Germany's Ageing Population Drives Record Social Spending, Ifo Study Finds
Record Social Spending in Germany: Key Findings and Drivers
BERLIN, Aug 24 (Reuters) - Combined spending related to old age and illness accounted for around 70% of total social spending in Germany last year, pushing the social budget to a new record high, according to an analysis by the Ifo institute published on Monday.
Major Contributors to Social Spending Increase
• Spending related to old age and illness accounted was responsible for over 80% of the real increase in spending since 1992, the analysis found
Demographic Change as a Structural Cost Driver
• The key structural cost driver behind this trend is demographic change, which is exacerbating the shift in the welfare state burden between generations
Impact of Economic Factors
• “The social budget is growing faster than GDP, which is why the weak economy is also contributing to the increase in the social budget share,” said Ifo researcher Emilie Hoeslinger
Statistical Overview of Social Spending Growth
• According to the analysis, social spending rose by 11.5%, or €104 billion ($121.33 billion), between 2019 and 2025, adjusted for price effects
• During this period, the social budget share reached a new record high, rising from 29.6% to 32%
Main Cost Drivers Identified
• The main cost drivers are the additional spending for the insured elderly population on illness and care, as well as higher federal pension payments
Currency Exchange Rate
($1 = 0.8572 euros)
(Reporting by Maria Martinez, Editing by Friederike Heine)
