News from 2020-06-04 / KfW Research
KfW Municipal Panel 2020
Municipalities are now much less optimistic about their finances as a result of the coronavirus crisis. Declining revenues and rising expenditures mean that the budget surpluses of the past years are likely to remain out of reach for the time being. Treasuries anticipate austerity measures to cover the budget deficits. This threatens to adversely impact capital expenditure in particular. Investment levels were already inadequate in 2019, as the perceived investment backlog has grown to EUR 147 billion, according to a national estimate. That does not bode well for local infrastructure and, hence, Germany’s competitiveness and quality of life.
Municipalities will have no shortage of investment needs and face more than enough challenges in meeting them in future as well. The message of the economic recovery package adopted on 3 June is therefore all the more important, as it should provide municipalities with a significant boost, not least for their capital expenditure.
The KfW Municipal Panel is based on an annual representative survey conducted by the German Institute for Urban Affairs. The survey covers municipal treasuries in cities, communities and districts and is recognised as an important point of reference in economic policy debate in Germany.
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