Digital Expenditure Partly Shifted into Special Funds
ResearchZEW Calculates Federal Digital Expenditure for Agora Digitale Transformation
The government’s total spending on digitalisation in 2025 increased compared to the year before. The increase was driven by the Climate and Transformation Fund and the Special Fund for Infrastructure and Climate Neutrality (SVIK). By contrast, the share of digital expenditure in the core budget declined. With the support of Agora Digitale Transformation, ZEW Mannheim has analysed the federal digital budget for 2025. On 21 April, [CBS1.1]the findings were presented in Berlin.
“The increase in digital expenditure is solely due to the special funds, into which several large infrastructure projects have been shifted. This raises the question of how long this increased commitment to digitalisation will last. The Special Fund for Infrastructure and Climate Neutrality is limited to 12 years and 500 billion euros. Once it expires, these programmes must be shifted back to the core budget,” says Professor Friedrich Heinemann, head of ZEW’s “Corporate Taxation and Public Finance” Research Unit.
Dr. Stefan Heumann, Managing Director of Agora Digitale Transformation, emphasises: “Germany has much catching up to do in digital transformation. The geopolitical context increases the pressure on policymakers to shift away from technological dependence and reliance on Big Tech. In addition, there are high funding requirements in the public sector. With our calculations, we provide transparency regarding digital expenditure in the federal budget and show where the political priorities lie.”
Core budget for digitalisation is shrinking
In the core budget, digitalisation expenditure fell significantly between 2024 and 2025, both in absolute terms and as a share of the total budget. In 2025, digital expenditure in the core budget amounted to 16.9 billion euros, corresponding to 3.4 per cent of the total core budget. In 2024, it stood at 19.2 billion euros or 4.0 per cent. The largest areas of digital expenditure in 2025 were the digitalisation of public administration (4.7 billion euros) and the Bundeswehr (4.3 billion euros).
Digital expenditure in the core budget has declined particularly in infrastructure (–57%), the economy (–28%) and research and innovation (–7%). Furthermore, the spending of available funds has lagged behind: In 2024, only 17.1 billion euros of the planned 19.2 billion euros was actually spent.
“This development suggests that the federal government is focusing its core budget digital spending primarily on public administration,” says Dr. Thomas Niebel, co-author of the study from ZEW’s “Digital Economy” Research Unit.
Infrastructure spending shifted to special funds
For example, broadband expansion, which was still allocated 1.8 billion euros in the core budget in 2024, will continue in 2025 with 2.9 billion euros allocated in the Special Fund for Infrastructure and Climate Neutrality (SVIK). A similar shift applies to the digitalisation of rail infrastructure. The implementation of the European Rail Traffic Management System (ERTMS), funded with 1.1 billion euros in 2024, has now also been moved to the SVIK.
“Politicians use the special fund mainly as a railway yard. Rather than generating additional investment, it primarily serves to increase financial leeway in the core budget,” says Heumann.
ZEW quantifies the digital budget
The digital budget brings transparency regarding federal expenditure on digitalisation. The researchers’ results are based on a systematic analysis of all budget items in the federal budget for 2025. For the first time, ZEW has also fully incorporated the special funds KTF (climate and transformation) and SVIK to capture the complete digital budget. Each item was checked for its relevance to digitalisation; where items had mixed purposes, a conservative digital share was applied.
In addition, two special analyses were conducted: first, the construction of a virtual budget for the newly established Federal Ministry for Digital Transformation and Government Modernisation to assess its actual financial scope; and second, a comparison of planned versus actual expenditure for selected years up to 2024, based on official budget accounts. With this study, ZEW continues its monitoring of the digital budget with support of Agora Digitale Transformation, enabling consistent comparison across the budget years 2019, 2021, 2023, 2024 and 2025.
