Germany's public debt reaches record high in Q1

Berlin, June 29 Germany's public debt continued to rise in the first quarter of 2023, reaching a record 2,406.6 billion euros ($2,628.4 billion), the Federal Statistical Office (Destatis) said.

Compared with the end of 2022, Germany took on 38.9 billion euros more in new debt which was "mainly due" to the federal government's increased financing requirements due to the energy crisis, Xinhua news agency quoted Destatis as saying.

To cushion the impacts of the skyrocketing energy prices, the government set up an economic stabilisation fund in November last year and put a cap on electricity and gas prices. Including 22.2 billion euros in new debt raised in the first three months, the fund's volume has so far grown to 52.4 billion euros.

Supported by anti-inflation measures, the rise in consumer prices for energy, which was still the main driver of inflation in Germany last year, slowed to 2.6 per cent in May, according to the latest official figures.

Despite high spending on crisis management, the German government intends to return to a balanced budget in 2023.

To this end, the "debt brake", which prevents new borrowing, is to take effect again for the first time since 2020.

"The debt brake is not just a constitutional imperative. It is an imperative of economic reason that monetary and fiscal policies work hand in hand to fight inflation and that they do not cancel each other out," said Minister of Finance Christian Lindner.