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19 May 2023

Overview of federal budgetary and financial data up to and including April 2023

Translated extracts from the Federal Ministry of Finance’s May 2023 monthly report

Federal budget trends up to and including April 2023

Table: Trends in the federal budget
Actual 20222023 targetActual¹
January to April 2023

Expenditure (€bn)²


Year-on-year change in % (year to date)


Revenue (€bn)³


Year-on-year change in % (year to date)


Tax revenue (€bn)


Year-on-year change in % (year to date)


Balance of pass-through funds (€bn)

Fiscal balance (€bn)


Financing/use of surplus:


Cash resources (€bn)


Seigniorage (€bn)

Movements in reserves⁴ (€bn)


Net borrowing⁵ (€bn)

115.445.6- 182,2


Federal revenue for the period from January to April 2023 totalled €114.9bn, up by 0.3% (€0.3bn) on the year. Federal tax revenue remained roughly at the same level as last year, declining by only 0.2% (€0.2bn). Further information on tax revenues is provided in the article “Tax revenues and economic environment in April 2023” [in German only] in the current edition of the monthly report.

The category of “other income” recorded a gain of 7.6% (€0.6bn) on the year in the January–April period. Within this category, revenue from fees and other income from guarantees increased by €0.2bn, and interest revenue from the Federation’s cash management system was also up by €0.2bn.


Federal expenditure totalled €157.2bn in the January–April 2023 period, a year-on-year increase of 1.2% (€1.9bn). A breakdown by economic category shows that the increase in expenditure was driven by investment spending, which was up by 50.2% (€5.3bn) on the year. This significant rise is primarily due to a special factor: a €6.3bn loan that was granted to the IMF’s Resilience and Sustainability Trust in January 2023 was recorded as an investment item, as required under budget law. After adjusting for this effect, investment spending was down by 9.0% (€1.0bn) on the year, which can be attributed to a year-on-year decline of €2.3bn in liquidity assistance to the Federal Employment Agency. Fixed asset investment was €0.2bn lower than in the same period last year.

Consumption spending was down by 2.4% (€3.5bn) on the year. There were several contrasting trends overall: Due to the general increase in interest rates, interest expenditure rose sharply, by €13.4bn. In contrast, ongoing grants and subsidies declined by 15.9% (€18.4bn), mainly because much less funding had to be made available to combat the adverse effects of the Covid-19 pandemic than in 2022. For example, federal payments to the health fund to cover pandemic-related costs totalled €1.2bn, a decline of €13.1bn. Pandemic-related assistance to businesses totalled €0.2bn, down by €5.3bn on the year. Pandemic-related compensation payments under section 21 of the Hospital Financing Act (Krankenhausfinanzierungsgesetz) amounted to €0.5bn in the first four months of 2023, €3.7bn less than in the same period last year. The decline in ongoing grants and subsidies was offset somewhat by the €2.0bn increase in spending on the citizen’s benefit.

Fiscal balance

The federal budget recorded a deficit of €42.3bn for the January–April 2023 period.

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 any given 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.

Trends in federal expenditure by function

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Trends in federal expenditure by economic category

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Trends in federal revenue

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Tax revenue in April 2023

2023 trends in tax revenue (excluding local authority taxes)

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Tax revenue trends

Total tax revenue

Total tax revenue (excluding local authority taxes) was down by 4.6% on the year in April 2023 (see the table “2023 trends in tax revenue (excluding local authority taxes)”). In particular, the yield from joint taxes fell by about 5%. Tax relief measures contributed significantly to this decline. Receipts from taxes accruing to the Federation climbed by almost 1% on the year, due to higher revenue from energy duty, insurance tax and aviation tax in particular, while the yield from tobacco duty declined. The fall in receipts from taxes accruing to the Länder, which has persisted since the second half of 2022, continued in April 2023, with a year-on-year decline of about 17%. This can be attributed primarily to the sustained decrease in revenue from real property transfer tax. In contrast, inheritance tax receipts rose in April 2023.

Joint taxes
In accordance with Article 106 (3) of the Basic Law (Grundgesetz), revenue from income tax, corporation tax and VAT accrues jointly to the Federation and the Länder. The local authorities also receive shares of receipts from income tax and VAT (Article 106 (5) and (5a) of the Basic Law). Under the budget system, income tax is broken down further into the following tax categories for statistical purposes: wages tax, assessed income tax, non-assessed taxes on earnings, and final withholding tax on interest and capital gains. The statistical category of “value added taxes” is subdivided into (domestic) VAT and import VAT. Revenue from joint taxes makes up approximately 75% of total tax receipts (based on the reference year 2022). The two highest-yielding tax types are value added taxes (approximately 32 percentage points) and wages tax (approximately 25 percentage points).

Allocation of tax revenue to the different levels of government

The substantial decline in receipts from joint taxes manifested itself in lower tax revenue for the Federation, Länder and local authorities. The Federation’s tax receipts (after accounting for supplementary federal grants that, under the fiscal equalisation system, are paid from the Federation’s revenues to Länder with below-average capacity) fell by nearly 1% on the year in April 2023. This decline in the Federation’s receipts was offset by (a) a rise in revenue from taxes accruing solely to the Federation and (b) a decline in transfers of EU own resources from the federal budget. In addition, the fixed payments from the Federation to the Länder in the vertical distribution of VAT revenue in accordance with section 1 of the Fiscal Equalisation Act (Finanzausgleichsgesetz) declined on the year, as did supplementary federal grants to the Länder in accordance with section 11 of the Fiscal Equalisation Act. In contrast, public transport subsidies to the Länder rose.

The tax receipts of the Länder fell by nearly 7% on the year in April, due to substantial decreases in revenue from both joint taxes and taxes accruing solely to the Länder. Mirroring the Federation’s trend, the rate of decline in Länder revenue from value added taxes was higher than the rate of decline in overall value added tax revenue. Local authorities’ take from their share of joint taxes was down by approximately 5% on the year.

Observations relating to specific taxes

Wages tax

Gross revenue from wages tax was up by only 1% on the year in April 2023, despite the sustained upwards trend in employment levels. This was primarily a result of the extensive tax relief measures. In particular, the basic personal allowance was increased as of 1 January 2023, and tax bracket thresholds were adjusted. Both measures were introduced in the Inflation Compensation Act (Inflationsausgleichsgesetz). If it hadn’t been for the effect of these measures and those contained in the 2022 Annual Tax Act (Jahressteuergesetz 2022), gross revenue from wages tax would have increased by an estimated 6%. In addition, the Inflation Compensation Act increased the child benefit as of 1 January 2023. As a result, child benefit payments – which are financed from gross wages tax revenue – recorded a substantial year-on-year increase of more than 15% in April 2023. On balance, cash receipts from wages tax were down by around 2% on the year in April.

Considering the revenue shortfalls caused by the above-mentioned changes to tax law, the revenue situation for wages tax was positive, due mainly to current labour market trends. The labour market’s performance remains robust in the face of the current economic challenges. Based on the most recent figures, employment continued to rise in March. In addition, short-time work levels remained substantially lower than in 2022, which significantly reduced the negative impact of short-time work on wages tax revenue.

Taxes on earnings

Receipts from assessed income tax and corporation tax in April 2023 were primarily derived from assessment activities for the years up to 2022. In the case of assessed income tax, retrospective prepayments for pending assessments were down on the year, while back payments for past periods rose slightly. Refunds recorded a somewhat more marked rise. After accounting for research allowance, investment allowance and owner-occupied homes premium payments, the impact of which was relatively small, net revenue from assessed income tax declined by nearly €0.7bn overall, to €0.1bn.

As for corporation tax, retroactive prepayments were up sharply. Back payments remained at the same level as last year, while refunds increased. In the case of corporation tax, too, the amounts deducted for research allowance and investment allowance payments were relatively small. On balance, net revenue from corporation tax totalled €1.1bn, a slight decline of €0.1bn.

Value added taxes

Revenue from value added taxes was down by nearly 5% on the year in April 2023. Cumulative revenue for the January–April 2023 period declined by more than 1%. Receipts from (domestic) VAT were down by nearly 4%, and receipts from import VAT fell by more than 7%. In the case of import VAT, this represents a continuation of the weakening of revenue trends in year-on-year terms. Over the January–April 2023 period, receipts rose by only about 6%, compared with an increase of nearly 30% in the final quarter of 2022. This reflects the decline in nominal imports of goods since mid-2022, which is partly due to price-related factors. Imports fell by more than 5% on the year in March 2023.

In the case of (domestic) VAT, the temporary reduction in the VAT rate on gas and district heating continues to have a noticeable dampening effect. In addition, the fall in purchasing power due to high inflation and consumers’ uncertainty regarding future economic trends are putting pressure on real consumption. For example, nominal retail sales (the decisive figure for tax revenue) remained almost stagnant in March 2023, meaning that the rate of change was well below the rate of inflation. Over the course of the year to date, it is fair to assume that the effects of the nominal stimuli from retail on VAT receipts have not even balanced out the revenue shortfalls resulting from the temporary reduction in the VAT rate on gas and district heating.

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Borrowing and guarantees

Borrowing trends for the Federation in April 2023

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Borrowing trends for the Federation (budget and special funds, excluding loan financing) in April 2023

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  Authorised amountAmount allocated as of
31 March 2023
Amount allocated as of
31 March 2022
in €bn

Export credit guarantees


Loans to foreign debtors, foreign direct investment, EIB loans

Financial cooperation projects


Food stockpiling

Domestic guarantees


International financial institutions


Treuhandanstalt successor organisations

Interest compensation guarantees

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Publication schedule¹ of the monthly reports and fiscal data
Monthly reportReporting periodPublication date
June 2023 issueMay 202322 June 2023
July 2023 issueJune 202320 July 2023
August 2023 issueJuly 202324 August 2023
September 2023 issueAugust 202321 September 2023
October 2023 issueSeptember 202320 October 2023
November 2023 issueOctober 202321 November 2023
December 2023 issueNovember 202321 December 2023
Key dates on the fiscal and economic policy agenda

15–16 June 2023

Eurogroup and ECOFIN Council meetings in Luxembourg

13–14 July 2023

Eurogroup and ECOFIN Council meetings in Brussels, Belgium

17–18 July 2023

Meeting of G20 finance ministers and central bank governors in Gandhinagar, India

15–16 September 2023

Eurogroup and informal ECOFIN meetings in Santiago de Compostela, Spain