German public spending ratio nearly 50% due to welfare costs

Germany's public spending ratio - which tracks government expenditure against gross national product - rose to 49.5% in 2024, due to an increase in welfare and social expenditure, the country's statistical office Destatis said on Friday.

The quota was up by 1.1 percentage points compared to 2023, while it was 2.2 percentage points above the long-term yearly average since 1991, the agency said in a press release.

The public spending ratio is used to measure state spending in relation to overall production in a country.

Germany's public spending ratio reached its highest level a few years after reunification in 1995, when the figure soared to 55.2%, as the government took over debt from the Treuhand, an agency established amid the collapse of the East German regime to privatize East German companies ahead of reunification.

The ratio also soared to similarly high levels during the coronavirus pandemic, reaching 51.1% in 2020 and 50.7% in 2021, amid increased government spending to provide Covid-19 testing and vaccines and keep businesses afloat amid the lockdowns.

Germany saw its lowest public spending ratio in 2007 with 43.5%.