German tax revenue surged in August after the country’s manufacturers enjoyed an “unexpectedly strong” start into the third quarter, the Finance Ministry said in its monthly report.
Tax intake jumped 12.8 percent last month from a year earlier, the ministry said in Berlin. The increase was led by types of revenue that fluctuate with the economy’s expansion, it said, noting also that “special effects” distorted the figure upward. Revenue in the first eight months rose 5.8 percent from a year earlier.
“Foreign trade was in robust shape at the beginning of the third quarter,” benefiting from exchange with countries outside the European Union, the ministry said. Demand for German products “still seems to be robust” and consumer spending will probably bolster the economy in coming months, it said.
German industrial production, factory orders and exports all rose in July. Still, growth slowed in the second quarter and business confidence has dropped for four straight months as the debt crisis dents demand for German goods in other euro-area countries.
“Worsening business sentiment over several months suggests a lessening speed of expansion of the German economy in the second half,” the ministry said. There’ll be a “certain weakening of export dynamism” and a “slower pace in the industry,” it said.
A survey by market researcher GfK SE showed that consumer sentiment is still “good” even while there’s uncertainty about the economic development, the report said. Germans would rather spend their money at present than save it, it said.
German stocks have risen to a 14-month high since ECB President Mario Draghi said on Sept. 6 that the bank may buy unlimited amounts of government bonds to contain yields in countries that seek assistance from Europe’s bailout fund.