German tax revenues fell 4.5% in March

Germany's federal and regional state governments' tax revenues fell in March compared with the same month of the previous year following two month of strong increases, the finance ministry said on Tuesday. For January to March, tax revenues rose by 1.6% compared with the same period last year, rising to 202.97 billion euros. In the first quarter, the ministry noted a decline in sales taxes, due to weak consumption.

Germany's federal and regional state governments' tax revenues fell in March compared with the same month of the previous year following two month of strong increases, the finance ministry said on Tuesday. The federal and state governments' tax revenue decreased by 4.5% year-on-year to a total of 77.55 billion euros ($82.65 billion) in March, according to the ministry's monthly report.

The decline was driven by lower revenues from income and corporate taxes. For January to March, tax revenues rose by 1.6% compared with the same period last year, rising to 202.97 billion euros.

In the first quarter, the ministry noted a decline in sales taxes, due to weak consumption. A recovery is expected through the year as inflation continues its downward trend and consumers gain purchasing power. For the whole year 2024, analysts have forecast tax revenues will increase to 877.65 billion euros, up 5.8% from the previous year, according to the report.

In mid-May the forecasts will be updated, showing if the German government has extra room in the difficult negotiations for next year's budget. Regarding the economic situation, sentiment indicators have brightened somewhat recently, the report noted.

The German government will on Wednesday nudge up its growth forecast for this year to 0.3%, from 0.2% previously, a source told Reuters on Friday. ($1 = 0.9383 euros)

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