”As the German Bundesrat is set to approve the 2025 federal budget today, Germany’s fiscal expansion is now about to go ”live”: the federal government will finally come out of provisional budgeting mode and embark on its defence and infrastructure spending spree — that is the plan, at any rate. In this note we lay out where the government plans to ramp up spending by year-end, and project where spending may actually land. We will keep tracking progress on a monthly basis from now. n Through the first eight months of the year, federal spending from the core budget and the special fund for the armed forces has amounted to EUR 327 bn. This run-rate implies an annual spend of EUR 491 bn – only about EUR 8 bn more than in 2024. With the new budget pencilling in total spending of about EUR 564 bn in 2025, the government has scope to up the pace significantly in Q4.”
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