The aging population is by far the biggest driver of the sharp increase in social spending in Germany, a leading economic research institute said in a report on Monday.
Germany’s social spending reached a record 32% of the budget in 2025, driven largely by an aging population and rising health care costs, the ifo Institute said.
Spending related to old age and illness accounted for around 70% of Germany's total social expenditure last year, according to the Munich-based institute.
The findings were included in its latest analysis, titled "Expansion of the Welfare State: Germany’s Social Budget 1992-2025."
The two categories accounted for more than 80% of the inflation-adjusted increase in social spending since 1992, with the institute identifying demographic change as the main structural cost driver.
