Germany to spend €20 billion on refugees in 2016: report

A new report estimates that Germany will spend around €20 billion on refugees, but a record surplus should also help absorb the cost.

The Kiel Institute for the World Economy (IfW) calculated in a report on Wednesday that Germany will end up spending around €20 billion this year on refugees.

Still, the institute said that the government would be able to take on this level of spending.

“This is a substantial sum, but given that it makes up around 1.4 percent of the total national budget, it will be manageable,” said Dr. Jens Boysen-Hogrefe of the IfW, in a statement.

The institute notes that at the same time, the country recorded a record surplus of €18.5 billion in just the first six months of the year, according to the Federal Statistics Office.

The €20 billion projection is based on the fact that the country has already spent €9.2 billion in the first half of the year, though it does not account for a scenario where the number of refugees arriving would sharply increase.

The amount spent so far went mostly towards social benefits for refugees, such as accommodation and healthcare, as well as renting out homes to refugees.

More has also been spent on increased staff for police and at the Federal Office for Migration and Refugees (BAMF).

The report states as well that the amount of money spent on cash benefits for asylum seekers had not increased as much.

The economists predict that there will also be some flow of money spent on refugees going back into consumption and investment, but this is estimated to be lower than the cost, at €15 billion.

Nearly half a million people (441,899) applied for asylum for the first time in Germany last year, which was an increase of 135 percent on 2014, according to the Federal Office for Migration and Refugees (BAMF).

Already in the first half of this year, that number has been surpassed, reaching 468,762 asylum applications.

But the rate of people arriving in Germany has dropped off. More than 16,000 people were registered as entering the country to apply for asylum in July, down from nearly 92,000 in January.