- Federal budget trends up to and including January 2019
- Trends in federal expenditure by function
- Trends in federal expenditure by economic category
- Trends in federal revenue
- Tax revenue in January 2019
- Borrowing and guarantees
Federal budget trends up to and including January 2019
Actual1 January 2019
|Tax revenue (€bn)||322.4||325.5||19.1|
Fiscal balance (€bn)
Financing/use of surplus:
|Net borrowing5 (€bn)||0.0||0.0||-52.4|
|Any discrepancies in totals are due to rounding.|
|1 As per accounts.|
2 With the exception of expenditure on the repayment of debt incurred on the credit market, allocations to reserves
and expenditure made to cover a cash deficit. Excluding expenditure from internal offsetting.
3 With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash
surpluses and seigniorage. Excluding revenue from internal offsetting.
|4 Negative values denote accumulation of reserves.|
|5 (-) debt repayment; (+) borrowing|
|Source: Federal Ministry of Finance|
Federal revenue in January 2019 totalled €20.7bn, down by 7.9% (€1.8bn) on the year. Tax revenue (including EU own resources) declined by 8.1% (€1.7bn). One of the main reasons was the fact that the Federation transferred €1.8bn more in GNI-based resources to the EU than it did last January.
Other revenue was 6% (€0.1bn) lower than in 2018.
Federal expenditure in January 2019 totalled €40.3bn, up by 4.4% (€1.7bn) on the year. Federal spending is separated into consumption and investment spending. Consumption spending was 4.9% higher in January 2019 than in the same month of 2018. This can be attributed primarily to increases in military procurement spending (up by 24.3%). Human resources spending was also up by 14.6% on the year. Possible reasons include the collective wage increases and civil servant salary increases that became effective over the course of 2018 as well as the hiring of new staff.
Due to an increase in federal grants to reimburse the Länder for social spending on basic income support for older people and for people with reduced earning capacity, ongoing grants for public administrations were roughly €850m higher than in January 2018. In 2018, the Länder did not draw down the grants for the fourth quarter of 2017 until February. This baseline effect means that the increase recorded this month can be expected to even out next month.
Starting this year, Länder are no longer able to draw down the funds for the final quarter of a year in the subsequent year – from now on, these funds are taken from the following year’s budget. This means that the grants can only be drawn down for four full quarters in each budget year, giving the Federation planning certainty over its transfers to the Länder.
Interest expenditure saw a sharp year-on-year decline of 11.4% in January 2019.
Investment spending was roughly €3.2bn, only slightly below the January 2018 figure.
The federal budget recorded a deficit of €19.6bn for January 2019.
Revenue and expenditure are subject to strong fluctuations over the course of the fiscal year and thus have an uneven effect on cash funds in individual months. Net borrowing also tends to fluctuate considerably over the course of the year. This means that the fiscal balance at this point in the year and the corresponding net borrowing figures are not reliable indicators of the end-of-year figures for the fiscal balance and net borrowing.
This is especially true towards the start of the year.
Trends in federal expenditure by function
Trends in federal expenditure by economic category
Trends in federal revenue
Tax revenue in January 2019
Total tax revenue (excluding local authority taxes) was up by 2.4% in January 2019 over the same month last year. Revenue from joint taxes rose by 2.2%. This strong result was driven by significantly higher receipts from wages tax and non-assessed taxes on earnings. VAT revenue posted only a small gain. Receipts from taxes accruing solely to the Federation were up slightly over January 2018, while receipts from taxes accruing solely to the Länder recorded a significant rise of 12.1% on the year.
EU own resources
Transfers of own resources to the EU, including customs duties, totalled approximately €2.5bn in January 2019, roughly €1.8bn more than in the same month of 2018. However, it should be noted that transfers of own resources to the EU were understated in January 2018, as approximately €1.7bn were refunded as part of the settlement process. In addition, fluctuations occur over the course of the year based on the EU’s financing needs at any given time.
Distribution among the Federation, Länder and local authorities
The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) were down by 7.3% on the year in January 2019. This can be attributed primarily to the year-on-year increase in transfers of own resources to the EU. In addition, a change in the distribution of VAT revenue in 2019 reduced the Federation’s tax take. Under the first ordinance on the 2019 Fiscal Equalisation Act (Finanzausgleichgesetz 2019), roughly 1.1 percentage points of the Federation’s share of VAT revenue have been transferred to the Länder and local authorities. Länder tax receipts recorded a year-on-year gain of 3.1%. Reasons include the change in VAT revenue distribution described above, but also dynamic growth in revenue from taxes accruing to the Länder. The local authorities’ take from joint taxes was up by 4.9% on the year.
Growth in wages tax continued to be very strong in January 2019, with gross revenue increasing by 5.3% on the year. This reflected continuing employment growth and rising incomes in Germany. Child benefit payments – which are financed from wages tax receipts – fell by 1.7% on the year in January 2019. On balance, cash receipts from wages tax increased by 6.7% on the year in January 2019.
January is a month when corporation tax revenue tends to be low. Gross receipts from this tax totalled €0.3bn in January 2019, a year-on-year decline of 57.7%. It should be noted, however, that the January 2018 baseline was high. Investment allowance payments are deducted from the gross receipts, although their impact is only marginal at this point. The resulting cash receipts from corporation tax also stood at approximately €0.3bn in January 2019.
Assessed income tax
January is a month when revenue from assessed income tax tends to be low. Gross receipts from this tax were up by 11.0% on the year and stood at roughly €2.0bn in January 2019. However, employee refunds were also slightly higher this year. Once these refunds are subtracted from the gross figure, net cash receipts totalled €1.1bn, a year-on-year increase of 13.4%.
Non-assessed taxes on earnings
January 2019 saw a 29.8% year-on-year rise in gross receipts from non-assessed taxes on earnings. Taking into account a decline in refunds paid out by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings rose by 38.8%. Since the trend in revenue from non-assessed taxes on earnings is very volatile over the course of the year, it is not possible to make predictions for the coming months.
Final withholding tax on interest and capital gains
Revenue from final withholding tax on interest and capital gains saw a sharp year-on-year drop of 45.7% in January 2019, likely due to a decline in tax revenue from capital gains.
Value added taxes (VAT)
Revenue from value added taxes posted only slight growth (0.9%) in January 2019, following a 9.0% rise in December. Receipts from domestic VAT rose by 1.8%, while import VAT revenue fell by 2.2%. The take from VAT tends to be very volatile over the course of any given year.
Taxes accruing to the Federation
In January 2019, revenue from federal taxes was 0.5% above last year’s level. Year-on-year revenue gains were posted for energy duty (up by 26.8%), motor vehicle tax (up by 1.5%), aviation tax (up by 45.5%) and solidarity surcharge (up by 4.7%). In contrast, declines in revenue were recorded for insurance tax (down by 3.8%), electricity duty (down by 1.7%) and tobacco duty (down by 25.7%). Trends in revenue from other taxes had only a minor impact on the overall results for taxes accruing to the Federation.
Taxes accruing to the Länder
The yield from taxes accruing solely to the Länder was up by 12.1% on the year in January 2019. This was driven mainly by higher receipts from real property transfer tax (up by 15.1%) and inheritance tax (up by 5.8%). Revenue gains were also recorded for beer duty (up by 13.9%) and betting and lottery tax (up by 10.1%). Receipts from fire protection tax posted a slight decline of 1.0% on the year.
Borrowing and guarantees
as of 31 December 2018
as of 31 December 2017
|Export credit guarantees||153.0||120.7||121.0|
|Loans to foreign debtors, foreign direct investment, EIB loans||65.0||42.7||44.3|
|Financial cooperation projects||28.5||22.8||19.6|
|International financial institutions||66.0||60.1||60.1|
|Treuhandanstalt successor organisations||1.0||1.0||1.0|
|Interest compensation guarantees||15.0||15.0||15.0|
|Monthly report||Reporting period||Publication date|
March 2019 issue
|February 2019||21 March 2019|
April 2019 issue
|March 2019||23 April 2019|
May 2019 issue
|April 2019||20 May 2019|
June 2019 issue
|May 2019||20 June 2019|
July 2019 issue
|June 2019||22 July 2019|
August 2019 issue
|July 2019||22 August 2019|
September 2019 issue
|August 2019||20 September 2019|
October 2019 issue
|September 2019||21 October 2019|
November 2019 issue
|October 2019||21 November 2019|
December 2019 issue
|November 2019||20 December 2019|
1 In accordance with the IMF’s Special Data Dissemination Standard Plus (SDDS Plus); see http://dsbb.imf.org
Source: Federal Ministry of Finance
|11–12 March 2019||Eurogroup and ECOFIN Council meetings in Brussels|
|5–6 April 2019||Eurogroup und informal ECOFIN Council meetings in Bucharest|
|11–12 April 2019||Meeting of G20 finance ministers and central bank governors in Washington, D.C.|
|12–14 April 2019||Spring Meetings of the IMF and World Bank in Washington, D.C.|
|16–17 May 2019||Eurogroup and ECOFIN Council meetings in Brussels|
|8–9 June 2019||Meeting of G20 finance ministers and central bank governors in Fukuoka, Japan|
|13–14 June 2019||Eurogroup and ECOFIN Council meetings in Luxembourg|
|28 June 2019||G20 summit in Osaka, Japan|
|Click here for the full schedule (only in German)|