BERLIN (MNI) – German federal and total tax revenue are still
trending well over target, according to data released Monday by the
Finance Ministry in its monthly report.
Total tax revenue excluding local taxes increased by 3.6% y/y in
August. In the first eight months of the year, total tax revenue
(ex-local taxes) was down 0.4% y/y. For the full-year, the government
has forecast a tax revenue decline of 2.6%.
Federal tax revenue alone in August rose 3.2% y/y and was down 3.5%
y/y in the January-August period, also trending above the full-year
projection for a decline of 5.1%.
Federal revenue — tax intake plus other income — was down 3.6%
y/y in the first eight months of the year, compared to a full-year
projection in the 2010 budget of -7.3%. Federal expenditures in the same
period were up 6.8% y/y, markedly below the full-year forecast of +9.3%.
The ministry reaffirmed its expectation that federal net new
borrowing this year will “be markedly below E60 billion.”
In the economic section of its report, the ministry predicted that
the upswing will continue through 2010, “albeit at a markedly slower
pace.” While the upward trend of exports has flattened recently, there
will still come significant growth impulses from foreign trade, it said.
The recovery of private consumption will likely gain strength and
contribute to a further pick-up of domestic demand, it predicted.
Against the background of a continued upward trend of the economy,
domestic inflation will likely pick up somewhat, the ministry reasoned.
Yet, pricing power of businesses remains low, it remarked.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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