Press release No. 317 of 24 August 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.
