By Maria Martinez
BERLIN (Reuters) – Germany’s council of tax experts expects 80.7 billion euros ($87.7 billion) less in total tax revenue in the 2024-2028 period compared with its October forecast, projections on Thursday showed.
For the federal government alone the council expects 41.6 billion euros less in tax revenues in the five-year period, according to its updated estimates.
Tax revenue for the federal government this year is seen coming in 5.6 billion euros lower than in the previous forecast, and for the federal states revenue is seen 5.4 billion euros lower and for municipalities 0.1 billion lower.
“These forecasts are a reality check for the federal budget,” Finance Minister Christian Lindner said on Thursday. “We need an economic turnaround instead of new debt.”
While the various ministries’ spending wishes for 2025 already exceed Lindner’s specifications by around 20 billion euros, the federal government is now expected to have 11 billion euros less in tax revenues next year than forecast in October.
For the minister, the forecasts were no surprise, as the economy remains weak after shrinking 0.2% last year – the weakest performance of the big euro zone economies – as high energy costs, lacklustre global orders and record high interest rates took their toll.
The government forecasts only 0.3% economic growth this year, which is more optimistic than the 0.2% forecast of the German Council of Economic Experts.
“We have to prepare the budget with the means that the taxpayers give us,” Lindner said at the press conference presenting the new forecasts. “Money doesn’t fall from heaven.”
($1 = 0.9205 euros)
(Reporting by Maria Martinez, editing by Kirsti Knolle and Hugh Lawson)
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