Federal government wants to borrow around 60 billion euros less in 2024
The federal government wants to borrow significantly less money from investors in the coming year. Federal securities with a total volume of 440 billion euros are to be issued, as the finance agency responsible for debt management announced on Tuesday. This is around 60 billion euros less than in the previous year, in which a record level of around half a trillion euros was reached.
The money will be used to plug the expected deficit in Federal Finance Minister Christian Lindner's budget. In addition, the federal government will have to repay securities worth almost 343 billion euros to investors in the coming year. This will require refinancing.
Auctions of conventional bonds on the capital market, such as ten-year federal bonds, are expected to raise 247.5 billion euros alone. In addition, a further 165 billion euros are to be raised on the money market - i.e. with securities with a term of up to one year.
The Finance Agency also wants to raise 17 to 19 billion euros next year with green federal securities, which will be used to finance environmentally and climate-friendly expenditure. "The issue volume in the green segment will be expanded again in order to strengthen the market for green bonds and make it more liquid," it said.
The major rating agencies rate Germany's creditworthiness as AAA. This signals an extremely low default risk to investors when they lend money to the German state. The latter in turn benefits from the "triple A" status, as it can borrow money at comparatively favorable conditions. In an international comparison, the state's total debt is low. According to the Kiel Institute for the World Economy (IfW), it is likely to fall to 63.3 percent of gross domestic product in the coming year.
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Despite the reduction in borrowing, the federal government still needs to repay securities worth nearly 343 billion Euros to investors. Due to this requirement, a large bundle of these short-term securities with a volume of approximately 165 billion Euros will be offered on the money market.
Source: www.ntv.de
