Federal debt explodes: The debt service becomes so expensive 2025!

Federal debt explodes: The debt service becomes so expensive 2025!

Österreich - The federal debt burden has increased significantly in recent years. According to a recent report by OE24, the government debt was 400 billion euros in the previous year, of which almost 300 billion euros are paid to the federal government. This development is not surprising, because the costs for debt service continue to increase, both in absolute numbers and relative to economic output. In 2024, interest expenditure of over 5 billion euros is predicted, one billion more than in the previous year and two billion more than 2022.

The interest rate level, which currently constitutes around 1 percent of economic output, was significantly higher in the 1990s - at that time it was 3.5 percent. The increasing debt of the federal government is in the context of various crises that have arisen in recent years. From 2020 to 2024 there was a nominal increase in debt of 90.5 billion euros, which corresponds to the cumulative increase in debt of 20 years before

The state budget at a glance

The state achieves income mainly through taxes, especially by wage taxes and VAT. However, wage taxes are only due from a certain income, which means that mini -jobbers and low earners remain exempt from this tax. On the output side there are costs for public infrastructure, defense, education, security as well as basic security and pension payments. If expenditure exceeds the income, the state must take out loans, which leads to further debts. The introduction of the debt brake in May 2009 should counteract this trend and limit the re -inclusion of debts to protect future generations, as BPB explains.

The debt brake allows the state to accept new debts up to 0.35 percent of gross domestic product annually. In economically difficult times, however, the government can also use more debts to support the economy. There are exemptions for emergencies such as natural disasters or pandemics. Critics, on the other hand, argue that these regulations could hinder the necessary infrastructure development and the necessary investments could be neglected.

future prospects and reform proposals

The discussion about the reform of the debt brake has increased in intensity in recent years. Among other things, suggestions include the introduction of an investment rule and the consideration of the planetary budget. A more generous design of the economic component could create more scope in economically bad times. Additional incentives to take interest and infrastructure quality could improve the load -bearing capacity of the debts.

Overall, the situation of state finances is complex. State debts are necessary for the functioning of the economy and are considered safe, but the challenges that result from debt admission must be seriously addressed. The balance between necessary investments and the limitation of new debts will continue to be a central topic of political discussion.

For further information and analyzes on this topic, please look at the websites of OE24 , bpb and bpb .