Germany's General Government Debt Rises in 2022, But Debt-to-GDP Ratio Falls

(MENAFN) According to the Bundesbank, Germany's general government debt stood at €2.57 trillion (USD2.79 trillion) in 2022, up by €71 billion compared to the previous year. The debt-to-GDP ratio, however, fell by 2.9 percentage points to 66.4 percent. Public debt in Germany is defined according to the Maastricht criteria, which sets a ceiling target of 60 percent of GDP.

Although Germany's public debt in 2022 was well below the peak level of 82.4 percent in 2010, it remained above the 60 percent ceiling target in line with the Maastricht criteria. Before the pandemic in 2019, Germany's debt ratio was 59.6 percent, indicating that the pandemic has had a significant impact on the country's finances.

Despite the increase in general government debt in 2022, the slower growth rate compared to 2020 and 2021 suggests that Germany's economy is recovering. The easing of pandemic conditions may have contributed to the slower growth rate in debt.

Germany's debt-to-GDP ratio is an important indicator of the country's financial health, as it reflects the country's ability to repay its debt. A higher ratio indicates a greater risk of default, which can have significant implications for the wider economy.

The decline in Germany's debt-to-GDP ratio in 2022 is a positive sign, as it suggests that the country's economy is growing at a faster rate than its debt. However, policymakers will need to continue to monitor the situation closely and take steps to address any underlying issues that may be contributing to the country's debt levels.



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