German Cabinet Unveils 2025 Budget with Record Investments

The German cabinet plans to approve its 2025 budget, featuring record investments of 78 billion euros, on Wednesday. The budget respects tight borrowing rules and aims to bolster economic growth and military upgrades. Additionally, a supplementary budget for 2024 with 11 billion euros in new borrowing is also planned.

The German cabinet is set to approve its draft for the 2025 budget, featuring a record investment of 78 billion euros ($85.07 billion), on Wednesday, as reported by finance ministry sources to Reuters on Monday.

Germany's coalition government has agreed on a 2025 budget that adheres to the country's stringent borrowing rules while aiming to stimulate sluggish economic growth and finance a significant military overhaul to meet NATO requirements. The budget includes net borrowing of 43.8 billion euros within a total budget of 481 billion euros, maintaining the debt brake that restricts borrowing to 0.35% of GDP.

The government also plans to approve a supplementary budget for the current year, adding 11 billion euros in additional borrowing for a total of 50.3 billion euros in net borrowing. The 2025 budget and supplementary budget for 2024 will come with a package of measures expected to contribute more than half a percentage point to economic growth, translating to an additional 26 billion euros ($28.14 billion) in economic output.

(With inputs from agencies.)