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Germany Increases 2027 Net Borrowing to €118 Billion, Up 7% Amid Weak Tax Revenue

2026-07-05 12:56:57

According to German Finance Ministry officials, Germany plans to increase its net new borrowing for 2027 to €118 billion (approximately $135 billion), up about 7% from April's forecast. The increase reflects lower-than-expected tax revenue, rising interest costs due to higher rates, and additional funding needs for the Federal Employment Agency's unemployment benefits payments.

Chancellor Friedrich Merz and Finance Minister Lars Klingbeil announced a reform package covering pensions, healthcare, and taxation. The Cabinet is expected to approve the reform plan and 2027 budget on Monday.

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