Germany’s debt-to-GDP ratio expected to rise to 78.25% in 2030

BERLIN, Oct 12 (Reuters) - Germany's debt is projected to reach 78.25% of its gross domestic product (GDP) by 2030, according to the country's stability council. The council, which oversees federal and state finances, issued this forecast on Monday.

The European Union's Maastricht Treaty sets limits on government budget deficits and overall debt. Ideally, a nation's deficit should stay below 3% of GDP, while its total debt should not surpass 60% of GDP.

Presently, Germany's deficit is forecast to increase from 2.9% last year to 5.25% in the coming year. Despite this projected rise, the deficit is still anticipated to remain at 4.5% of GDP by 2030.

The surge in borrowing can be attributed to a €500 billion ($559 billion) infrastructure fund, as well as more flexible borrowing guidelines for defense expenditures. German Finance Minister Lars Klingbeil commented on the meeting of the stability council, noting that the country's economic situation is improving following years of stagnation. He attributed this growth to significant investments that are driving economic activity and aiding Germany's recovery from weak growth.