Nov. 5 (Bloomberg) -- Germany’s government announced a revenue outlook that may bolster Chancellor Angela Merkel’s pledge to cut taxes by 24 billion euros ($36 billion) over the next four years.

An independent panel of experts emerged today from a three- day meeting in Hamburg to forecast total tax revenue of 511.5 billion euros next year, 1.1 billion euros more than estimated six months ago. That compares with a shortfall of 45 billion euros in the May outlook.

The forecast “does supply some evidence that the economy and with it revenue is stabilizing after the worst recession in memory,” Michael Meister, finance spokesman for Merkel’s Christian Democrats, said in interview yesterday. That “will give us the margin we need to reduce taxes as promised in the coalition contract.”

Improving revenue strengthens Merkel’s hand as she sets about shoring up growth in Europe’s biggest economy, the No. 1 priority of her government which took office Oct. 28. Merkel has come under fire from politicians and industry for her pledge to do that by cutting taxes even as debt soars to a record.

Even so, the tax panel estimates combined revenue for the federal government, the 16 states, municipalities and from the European Union of 524.1 billion euros, 3 billion euros less than forecast in May.

“There’s no room to rest on our laurels,” Meister said. “We must make every effort to roll back the federal deficit.”

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net

Last Updated: November 5, 2009 07:19 EST