Germany says its borrowing rose in 2022 due to pandemic, Ukraine war

Germany says its borrowing rose in 2022 due to pandemic, Ukraine war

BERLIN (Reuters) – The German government‘s net borrowing rose to 115.4 billion euros ($124.5 billion) in 2022 due to the COVID-19 pandemic and the war in Ukraine, but was lower than originally expected, the country’s finance ministry said on Thursday.

Last year, government borrowing was at its third-highest level in the history of Germany, following a record 215.4 billion euros in 2021 and 130.5 billion in 2020, according to the finance ministry.

The German government had envisaged net borrowing of 138.9 billion euros in 2022. The finance ministry said actual borrowing was below that estimate because all the spending earmarked for the pandemic and negative impact of the war in Ukraine had not been needed.

“We are not exhausting all borrowing possibilities by hook or by crook, but only as far as necessary,” Finance Minister Christian Lindner said.

Germany spent 481.3 billion euros last year, 14.5 billion euros less than planned, according to the finance ministry. This compared to an expenditure of 557.1 billion euros in 2021.

The German parliament suspended the constitutionally enshrined debt brake between 2020 and 2022 to allow for extra spending in response to the pandemic and the effects of the war in Ukraine. The government hopes this year to comply again with the debt brake, which limits the budget deficit to 0.35% of gross domestic product.