Germany Budget Surplus

Germany Budget Surplus as calculated in the first half of 2007 surpassed the expectations of economists and government. According to the German budget, earnings increased by 5.6% during this period . Germany generated a $1.6 billion surplus within the mid of 2007 which is the second highest surplus over the last 20 years.

Interpretation of Budget Surplus in Germany:

• The budget of Germany had witnessed deficits due to the incorporation of East Germany in 1990. But the wages in Germany had increased by 29.8% over the last few years. The corporate tax revenue also rose by 11.9%. From the year 2002 to 2005 Germany had been successfully decreasing the rate of unemployment.
• The data given by the Federal Statistical Office shows that the surplus amount in the budget is 1.2 billion euros over the first six months of 2007 while there was a deficit of 23.0 billion euros in the last year .
• Revenues increased by 10.4 % but the expenditures managed only a 0.7% hike. Income tax revenue rose by 30%. The indirect taxes like corporation tax and value added tax experienced hikes by 12% and 18% respectively.
• The federal revenue has increased by 5.6% from the last year which is the cause of the surplus.
• The social insurance system of Germany has showed a surplus of 7 billion euros.

Effects of Budget Surplus:

• The Germany budget surplus helps the country’s economy growth to get momentum in the second half of 2007.
• The German government has planned to minimize the tax burden for the next generations.
• The crisis over the German economy due to the U.S mortgage sector can be removed. Also, a huge amount of debt can be reduced.
• More income and value added tax revenue by means of bonuses and seasonal sales will be achieved in the second part of the year.