NewsRescue
Germany’s public debt reached a new high of €2.37 trillion ($2.6 trillion) at the end of 2022, according to data released on Wednesday by the Federal Statistical Office (Destatis).
The overall public budget’s debt to the non-public sector increased by 2% year on year, or by €46.1 billion ($50 billion), compared to 2021. Destatis attributed the rise to emergency measures taken in response to the Covid-19 pandemic and the energy crisis.
Debt increased by 1.8%, or €41.9 billion ($45.5 billion), compared to the end of the third quarter of 2022, raising concerns about the impact on the German economy and financial stability. The average per-capita debt was €28,155 ($30,600), representing a growing burden on the population.
Consumer activity has been eroded by spiraling inflation, a raging energy crisis, and expectations of a further slowdown in the EU’s largest economy, posing a threat to economic prosperity.
According to economists, the rising debt owed to the non-public sector exemplifies Germany’s difficult economic conditions as a result of the pandemic and the energy crisis. According to Destatis, the non-public sector includes banks and other domestic and foreign economic sectors, such as private businesses in Germany and abroad.
The government’s efforts to mitigate the effects of these crises have resulted in an increase in public borrowing. German Finance Minister Christian Lindner previously stated that the government needed to limit spending, implying that the state will be unable to quickly solve current economic problems such as falling wealth levels.
Germany, whose industry is primarily powered by natural gas, has been struggling to keep up with rising energy costs. The country has pledged to replace imports from its former largest supplier, Russia, by mid-2024. Attempts to diversify gas supplies, on the other hand, have contributed to the energy crisis.