German Tax Revenue to 2018 to Beat Old Forecast by EU19 BillionBrian Parkin and Rainer Buergin
Chancellor Angela Merkel’s government coffers are set to fill more quickly over the next four years than previously estimated, Finance Ministry forecasts showed today.
Federal government receipts between 2014 to 2018 will probably rise by 6.3 billion euros ($8.7 billion) more than forecast in November, according to the ministry’s tax panel. Revenue for local, state and federal governments this year will probably be 400 million euros lower than predicted before exceeding forecasts starting in 2015, the panel said in a statement.
Extra federal income would be a boon to Merkel, who is seeking to forgo additional borrowing in her budget starting next year. The federal deficit is forecast to drop to 6.5 billion euros this year, the lowest in 40 years.
The government must observe “strict spending restraints” to ensure a budget without net new borrowing in 2015, Finance Minister Wolfgang Schaeuble told reporters in Berlin today. Germany doesn’t have “additional spending leeway,” he said.
Germany’s economy, Europe’s largest, will grow by 1.8 percent this year, compared with 0.4 percent in 2013, and by 2 percent in 2015, the European Commission said on May 5. Unemployment will drop to 5.1 percent this year from 5.3 percent last year.