By Maria Martinez
BERLIN (Reuters) – Germany’s federal and state government tax revenue rose 8.9% in January from the previous year, the finance ministry said in its monthly report on Tuesday.
Total tax revenue reached 66.7 billion euros ($69.72 billion), according to the report.
Nevertheless, forward-looking economic indicators continue to reflect a difficult economic situation, the report said.
Europe’s ailing largest economy is under pressure after it contracted in 2024 for the second year in a row. Following Sunday’s election, the economy faces months of policy uncertainty until a coalition is formed, prolonging its current stagnation.
Two major economic institutes are already forecasting a third year of economic contraction in 2025, which would be the longest period of weakness in Germany’s post-war history.
For 2025, tax experts see tax revenue increasing to 893.8 billion euros, up 3.8% from the previous year, according to the report.
The opposition conservatives won the election, putting CDU leader Friedrich Merz – who has promised extensive tax cuts – on track to be the next chancellor.
Other parties have criticised the CDU, arguing that the party does not spell out how all its promised tax cuts would be financed.
The full CDU reform programme would reduce state revenue by 97 billion euros per year, according to an Ifo study.
($1 = 0.9567 euros)
(Reporting by Maria Martinez, Editing by Rachel More)
Comments