German national debt falls again in 2018

Strong tax receipts and low interest rates drove German state debt down to €2.063 trillion ($2.313 trillion) in 2018, €52 billion less than the previous year, the central bank reported in Frankfurt on Friday.

Modest economic growth also helped push debt as a percentage of gross domestic product down to 60.9 per cent, just over the 60-per-cent rate agreed as the maximum under the euro currency group’s Maastricht criteria.

The Bundesbank said that government at federal, state and municipal level had taken in more money than it spent over 2018, which also eased the debt rate.

In 2010, the German national debt rate hit a recent peak of 81.8 per cent of GDP, according to revised Bundesbank figures.

The Maastricht criteria, which came into effective in 1993, stipulate the conditions for EU member states to adopt the euro. The aim of the standards are to ensure the currency’s stability.

States that run up too much debt in proportion to their economic output may find it expensive to print fresh money, for example.

Source: dpa

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