Tax revenues increase in Germany amid rising social spending, funding deficits
Date
7/23/2024 7:42:59 AM
(MENAFN) Germany's Finance Ministry has reported a notable increase in tax revenues for the first half of 2024, reaching 176.5 billion euros. This figure represents a 4.6 percent increase, or an additional 7.8 billion euros, compared to the same period in 2023. Alongside these tax revenues, the government also garnered approximately 20 billion euros from various other sources, including interest income, toll payments, and proceeds from share sales.
Despite this increase in revenues, government spending fell by 4 percent, primarily due to lower interest rates. However, the government had to boost its expenditure on social benefits and pension increases during the first half of the year compared to the previous year. As a result, the federal government ended June with a financing deficit of 23.6 billion euros. This deficit is subject to significant fluctuations throughout the fiscal year, and thus, it does not provide a definitive picture of the year's final financial outcome.
Looking ahead, the Federal Government plans to incur an additional 11.3 billion euros in debt through a supplementary budget. This measure aims to address the increased demands for social benefits and other expenditures. Despite the existing debt constraints, known as the "debt brake," the weak economic environment may compel further borrowing.
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