German: Public investments in 2025 fell 25% short of target

Danske Research Team Danske Bank A/S

Germany delivered a historical shift to its fiscal policy last year with a change to the “debt brake” and a EUR 500 bn infrastructure package. With the funding in place focus is now on the implementation of the stimulus measures, which will be key for the economic outlook, the ECB, and most European financial markets. In this publication series we will provide regularly updates on the German fiscal expansion drawing on monthly data on public investments and defence spending.

The German Federal Ministry of Finance have just revealed the preliminary results of the federal budget for 2025. The public deficit was 2.4% of GDP with expenditures totalling EUR 493 bn, slightly below the target of EUR 503 bn.

Total public investments amounted to EUR 86.8 bn in 2025 which was 17% higher than in 2024 but at the same time 25% below the targeted EUR 115.6 bn.

Defence expenditures amounted to EUR 87.0 bn in 2025 which was 18% more than in 2024 but 7% short of the EUR 94.0 bn target.

The failure to reach the targets is a slightly dovish signal for the ECB but not enough to cause a rate cut in 2026 as there is still a large increase in spending. At the same time the undershooting of the targets supports our view of no hikes in 2027. The 2025 public investment target was very ambitions as funding was only available from the final quarter of the year. Moreover, Germany has implemented three new laws to quicken the bureaucratic process, so we expect 2026 to deliver further rises.

Download The Full German Fiscal Tracker

Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold moves away from one-week low, climbs above $4,450 as USD edges lower ahead of CPI

Gold builds on its modest intraday recovery from the $4,300 neighborhood, or a one-and-a-half-week low, touched earlier this Friday, and climbs above $4,350 heading into the European session. The upside potential, however, seems limited as traders opt to wait for the release of US consumer inflation figures before placing directional bets.

Cardano approaches critical support as correction risks grow

Cardano (ADA) recovers slightly, trading at $0.206 at the time of writing on Friday, inches above the critical support zone after losing more than 6% so far this week. Weakening derivatives data and fading bullish momentum suggest a bearish near-term outlook, with a decisive close below the support zone potentially triggering a deeper correction for ADA.

US core CPI data set to ease in August as markets reprice Fed September rate decision

The US Bureau of Labor Statistics will publish the August Consumer Price Index data on Friday. The report is expected to show a small decline in annual core inflation. Any divergence from analysts’ estimates could influence the Federal Reserve’s policy outlook and impact the US Dollar’s valuation.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.