Overview
- Germany's Staatsquote, which measures public spending as a share of GDP, reached 49.5% in 2024, marking a 1.1 percentage point increase from 2023.
- The rise was primarily fueled by increased social benefits, including a 4.57% pension hike, a 5% Pflegegeld increase, and an 11% overall jump in social spending.
- Economists warn that the Staatsquote is likely to surpass 50% in 2025, potentially undermining Germany's international competitiveness due to higher taxes and reduced economic dynamism.
- Germany's public spending ratio is above its historical average but remains in the EU mid-range, with Finland at 57.6% and Ireland at 23.5%.
- Demographic challenges, such as an aging population, continue to exert pressure on social spending, contributing to the growing Staatsquote.