Corona takes public debt to record highs – economy

The fight against the corona crisis and its economic consequences is pushing the debt of the German state to a record level. At the end of 2020, federal, state, municipal and social security funds, including all supplementary budgets, stood at € 2,172.9 billion, according to the Federal Statistical Office. This is 14.4% or 273.8 billion euros more than a year earlier and the “highest level of debt ever measured in debt statistics at the end of a year”, as it was called. “The increase is due in particular at the federal and state levels to the measures taken to deal with the corona pandemic and, according to preliminary results, continued in the first quarter of 2021”, specified the statistician. The total corresponds to a per capita debt of 26,141 euros – 3,281 euros more than at the end of 2019.

“The increase in public debt during the Corona crisis of 2020 was massive, but economically speaking it is not of concern,” said union-affiliated IMK institute scientific director Sebastian Dullien. The debt ratio, i.e. the ratio of commitments to annual economic output, is significantly lower than it was after the 2012 financial crisis and is expected to decline again rapidly from 2022 Germany’s rate is also in the lower third by international comparison. “As we saw in other countries during the euro crisis, frantic cuts in public spending or rabid tax increases to reduce the debt ratio are counterproductive,” said Dullien. They have slowed economic growth.

The level of federal debt has increased particularly sharply. This increased by 18.1% to 1,403.5 billion euros. In the Länder, the increase was 9.8% to now reach 636 billion euros. Per capita debt was highest in the city-states, Bremen at 57,823 euros, Hamburg at 19,181 euros and Berlin at 16,307 euros. However, unlike the territorial states, the three federal states also perform municipal tasks. According to statistics, the lowest per capita debt was found in Saxony with 1,244 euros and in Bavaria with 1,359 euros. The debt of the municipalities increased by 1.5% to 133.3 billion euros. Social commitments, on the other hand, were again reduced and amount to 44 million euros.

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