Berlin, July 07 (QNA) - Germany's Finance Minister Lars Klingbeil on Tuesday outlined the 2027 federal budget draft and the government’s financial plan through 2030 before the Budget Committee of the Parliament, following the Federal Cabinet’s approval of the proposal.

The parliamentary statement said the budget draft contemplates federal spending of €555.4 billion in 2027, an increase of €30.9 billion, or 5.9 percent, compared with the 2026 budget.

The statement added that the draft allocates €50 billion for investments, compared with €47.9 billion in 2026, while debt-interest payments are poised to rise to €41.9 billion, up €11.6 billion from the previous year due to higher borrowing costs.

The German Parliament clarified that the Labor and Social Affairs sector receives the largest allocation in the budget, totaling €201.5 billion, compared with €197.3 billion in 2026.

The defense sector ranks second, with its allocations rising to €109.7 billion, compared with €82.7 billion the previous year, as part of the government’s plan to bolster defense capabilities and fulfill its commitments within NATO.

The Transport Ministry ranks third, with allocations totaling €26.4 billion, compared with €27.9 billion in 2026.

The budget draft indicated that federal revenues would reach €555.4 billion, achieving balance with total spending, while tax revenues are estimated at approximately €394.7 billion, an increase of €7.5 billion compared with 2026.

Meanwhile, the government plans to raise net borrowing under the core budget to €118.7 billion in 2027, an increase of €20.7 billion from the previous year.

The draft stated that the government will fully exhaust the constitutionally permitted ceiling for ordinary borrowing, amounting to €33.4 billion, while an additional €85.4 billion will be allocated to finance defense and security expenditures, based on the constitutional exception granted for these areas.

The government also expects spending growth to continue in subsequent years, reaching €588.2 billion in 2028, €597.8 billion in 2029, and €635.4 billion in 2030. (QNA)