Berlin: Germany’s public debt rose by pound 151 billion ($176.1 billion) to pound 2.66 trillion ($3.1 trillion) at the end of last year, driven in part by higher defense spending and infrastructure investment, according to preliminary data released Thursday.

According to Anadolu Agency, the Federal Statistical Office, or Destatis, reported that total public sector debt-which includes the federal government, states, municipalities, and social security funds-increased by 6% year-on-year. The debt stock saw a rise of pound 151 billion compared to the end of 2024, reaching pound 2.66 trillion. Notably, in the final quarter of 2025 alone, debt climbed by pound 50.8 billion, or 1.9%, from the previous quarter.

Federal government debt witnessed a rise of pound 32.2 billion in the last quarter, totaling pound 1.84 trillion. Destatis attributed this increase largely to ‘special funds,’ which include allocations for the German armed forces, known as the Bundeswehr, and infrastructure projects. Debt related to the Bundeswehr fund surged 30% to pound 43 billion, while debt associated with the Infrastructure and Climate Neutrality Special Fund (SVIK) reached pound 24.3 billion.

Debt held by Germany’s states increased by pound 8.7 billion to reach pound 624.6 billion. Among the states, Hamburg experienced the largest rise at 7.8%, followed by Bremen and Bavaria, whereas Mecklenburg-Western Pomerania managed to reduce its debt by 3.9%.

Municipalities and municipal associations also saw their debt levels rise by pound 9.8 billion, or 5.3%, bringing the total to pound 196.3 billion. Experts noted that local authorities, having depleted their reserves, are increasingly reliant on new borrowing to sustain public services.