The federal and state governments collected almost two percent more taxes in 2023 than in the previous year. Revenues totaled 829.77 billion euros, according to the Federal Ministry of Finance's monthly report, which is due to be published on Tuesday. The increase was well below the inflation rate of almost six percent.
The FDP-led ministry justified this with numerous relief measures from the traffic light government against high energy prices. In December 2023, tax revenue remained roughly stable at just under 109 billion euros.
The German economy shrank by 0.3 percent in 2023. "A revival in economic momentum is still a long way off at the beginning of 2024; companies' short-term expectations have recently remained pessimistic across all sectors," emphasized the Ministry of Finance. "This year, a domestically driven recovery is only likely to begin gradually when rising real incomes from noticeable wage and salary increases coupled with falling inflation become noticeable in private consumption."
The federal government plans to publish the annual economic report with new economic estimates on February 21st.
hen/Reuters