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

The German government has introduced a 2027 draft budget featuring higher-than-expected funding needs of EUR 210.5bn. Structural changes, including delayed debt repayment, have prompted Goldman Sachs to raise general government deficit projections for 2027-2029.

Key Takeaways

• 1.The German government passed a draft budget for 2027 with net borrowing of EUR 203.7bn and total funding needs of EUR 210.5bn (4.4% of GDP).
• 2.Funding requirements for 2027 are EUR 14bn higher than April estimates and EUR 38bn above last year's medium-term plan.
• 3.The government plans to defer Covid-related debt repayment to 2033, increasing the annual deficit limit by EUR 12.4bn from 2028-2030.

Table of Contents

• Germany: Government Draft Budget Plans With Higher Deficits for 2027 and Beyond
• Main Points
• Exhibit 1: Budgeted Deficits Have Been Continuously Revised Up Since Last Year
• The European Economics Team
• Disclosure Appendix

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