Germany records a 2.9% budget surplus in the first half of 2018

[Tender Branson]

General government recorded surplus of 48.1 billion euros in the first six months of 2018

WIESBADEN – Net lending of general government amounted to 48.1 billion euros in the first half of 2018 according to provisional results of the Federal Statistical Office (Destatis). When measured as a percentage of the gross domestic product at current prices (1,671.8 billion euros), this is a surplus ratio of 2.9%. These figures are based on the definitions of the European System of Accounts (ESA) 2010. The budgets of central government, state government, local government and social security funds continued to benefit from both a positive development of employment and economy and moderate spending policies. However, only limited conclusions can be drawn for the annual result from the results for the first six months.

Net lending is calculated as the difference between revenue (761.8 billion euros) and expenditure (713.7 billion euros) of general government. In the first half of 2018, all government levels contributed to the positive budget balance. Central government recorded the highest level of net lending (19.5 billion euros). State government achieved a surplus of 13.1 billion euros, social security funds of 9.0 billion euros and local government of 6.6 billion euros.

The revenue of general government rose by 36.5 billion euros (+5.0%) in the first half of 2018 on the same period a year earlier. The most important source of government income is taxes, which amounted to 403.5 billion euros, thus accounting for a good half of total revenue. The increase in tax revenue (+5.2%) continued to be high in the first half of 2018, with the rise in current taxes on income, wealth, etc. (+7.2%) being far larger than the increase in taxes on production and imports (+2.7%). The dynamic development of social contributions (+4.2%) continued as a result of the positive employment trends. An increase was also observed in government revenue from interest and dividends received (+29.3%), especially because the Bundesbank profit recorded in national accounts increased markedly from the low level observed in the previous year.

Government expenditure rose modestly (+1.2%) in the first half of 2018. It was also due to the effects of basing operations on a tentative budget until mid-July that central government spent less compared with the previous year. And, due to the continuing very low interest rates and lower debt, government interest payments decreased again (-8.7%). In contrast, the rise in government investment expenditure was above average in the first half of the year (+12.3%). A marked growth was recorded, too, in expenditure on compensation of employees (+4.0%). Reasons for this were additional staff and higher compensation.

https://www.destatis.de/EN/PressServices/Press/pr/2018/08/PE18_317_813.html

[OSR stands with Israel]

Looks like they can meet the 2% defense spending requirement

[🦀🎂🦀🎂]

Looks like they can meet the 2% defense spending requirement

Dear Germany,

It has come to our attention you aren't wasting money. This unnerves us, please immediately desist in your efficient ways and spend it on useless toys

Regards

[windjammer]

Having a such high budget surplus is dumb. They could spend it to encourage economic growth

[Tender Branson]

Having a such high budget surplus is dumb. They could spend it to encourage economic growth

LOLno.

Germany already has high economic growth. No need for higher growth.

They should invest part of the surplus into paying down debt as a % of GDP further (to remain viable for future generations and not to end up like Greece or Venezuela), invest some into the military and the largest part to combat old age poverty by raising minimum pensions to a level above the federal poverty threshold + invest the remaining in infrastructure and a green economy.

[Kingpoleon]

Dear Germany:

You know how we placed all those military restrictions on you? Please break them. Literally nobody cares.

- X America

[Anzeigenhauptmeister]

Let's not forget: We're still in debit.
Germany still has outstanding national debts of over 2,079,000,000,000 € (2,416,893,633,000 $).

[windjammer]

Having a such high budget surplus is dumb. They could spend it to encourage economic growth

LOLno.

Germany already has high economic growth. No need for higher growth.

They should invest part of the surplus into paying down debt as a % of GDP further (to remain viable for future generations and not to end up like Greece or Venezuela), invest some into the military and the largest part to combat old age poverty by raising minimum pensions to a level above the federal poverty threshold + invest the remaining in infrastructure and a green economy.

I mean, investing in infrastructure boosts growth you know.

But yes it's dumb to have a such high surplus.

[OSR stands with Israel]

Looks like they can meet the 2% defense spending requirement

Dear Germany,

It has come to our attention you aren't wasting money. This unnerves us, please immediately desist in your efficient ways and spend it on useless toys

Regards

Lmao so violating terms of a treaty should be considered acceptable

[🦀🎂🦀🎂]

Looks like they can meet the 2% defense spending requirement

Dear Germany,

It has come to our attention you aren't wasting money. This unnerves us, please immediately desist in your efficient ways and spend it on useless toys

Regards

Lmao so violating terms of a treaty should be considered acceptable

It's not a treaty, it's just a gentleman's agreements that NATO countries at some stage should increase their military spending to two percent, which the German establishment is already doing anyway. Just kick them out if it aggregates you that much.

[parochial boy]

I reckon the USA should be paying compensation to Germany for the refugee crisis the Yanks helped fuel

[Ban my account ffs!]

Germany has an enormous demographic bulge of people in their 50s and early 60s.. peak earning years in many jobs.  This results in good tax revenues.  But the picture only gets dimmer over the next 20 years for them as even medium sized towns begin to empty out in the countryside and pension costs begin to weigh very heavily.

[DINGO Joe]

Germany has an enormous demographic bulge of people in their 50s and early 60s.. peak earning years in many jobs.  This results in good tax revenues.  But the picture only gets dimmer over the next 20 years for them as even medium sized towns begin to empty out in the countryside and pension costs begin to weigh very heavily.

That sounds a little like the US, good thing we're running a budget surplus too.

[Ban my account ffs!]

Germany has an enormous demographic bulge of people in their 50s and early 60s.. peak earning years in many jobs.  This results in good tax revenues.  But the picture only gets dimmer over the next 20 years for them as even medium sized towns begin to empty out in the countryside and pension costs begin to weigh very heavily.

That sounds a little like the US, good thing we're running a budget surplus too.

We're screwed fiscally.. but not as much demographically.  Our age pyramid is very uniform for the under 65 crowd.  Though fertility has been declining the past 10 years and has taken a tumble since Trump became president.

[Ban my account ffs!]

For comparison. 

[Tender Branson]

Snowy,

Germans will adapt to these changes. If the strong debt-reduction continues for another 10 years, it is likely that Germany will only have some 40% debt as a % of GDP left by 2030, allowing them to spend more again in times of "hardship" (such as spending more on pensioners and for health and old-age care). Also, German seniors are getting healthier each year, allowing them to take more active roles in society and their towns even at high ages. So, the effects of the ageing society won't be nearly as bad as you'd think. Also, declining rural landscapes are not a bad thing, because these areas can be used as recreational areas and declining biodiversity there could make a u-turn, as fewer people live there and use it for business activities. Also, older societies have a huge benefit: less crime.

[Ban my account ffs!]

Itsynot all bad, of course.  I just wanted to point out that now is the time there should be budget surpluses as they are easier.  That wont last much longer for Germany. 

[Tintrlvr]

Having a such high budget surplus is dumb. They could spend it to encourage economic growth

LOLno.

Germany already has high economic growth. No need for higher growth.

They should invest part of the surplus into paying down debt as a % of GDP further (to remain viable for future generations and not to end up like Greece or Venezuela), invest some into the military and the largest part to combat old age poverty by raising minimum pensions to a level above the federal poverty threshold + invest the remaining in infrastructure and a green economy.

I mean, investing in infrastructure boosts growth you know.

But yes it's dumb to have a such high surplus.

The surplus is fine. The economy is doing great. During a strong economy is the time to run a surplus and pay down the debt so that you can run up bigger debts in future downturns. Sure, Germany shouldn't be shorting infrastructure investment that it otherwise would make specifically to run a surplus (which it isn't doing), but infrastructure will be cheaper to invest in and such investment would have a greater positive economic effect during a future recession than it would now.