In the second year of the coronavirus pandemic, general government debt in Germany was up by €162 billion to €2.476 trillion. The debt ratio, meaning the ratio of debt to nominal gross domestic product (GDP), rose from 68.7% to 69.3% in 2021 and is therefore well in excess of the Maastricht Treaty’s reference value of 60%, as was the case last year.

Despite the considerable increase in debt, the debt ratio rose by only 0.6 percentage point on the year. This reflected strong growth in nominal GDP, which recorded a rise of 6% in 2021 partly on account of rising prices. Strong GDP growth offset the effect of the rise in debt on the ratio to a large extent.

The lion’s share of the increase in debt was attributable to the general government deficit of €132 billion. The government used the remaining new debt to fund a build-up of financial assets. Liquidity reserves held as deposits in the banking system made up a large part of these assets.

Government debt as defined by the Maastricht Treaty and determined by the Bundesbank is a component of what is known as the Maastricht notification. The EU Member States report data on the general government fiscal balance and on debt to the European Commission each year at the end of March and end of September. To this end, the Federal Statistical Office calculates Germany’s balance (deficit/surplus).