Germany’s record budget surplus triggers calls for tax cuts
Surplus equivalent to 2.9% of economic output is highest since reunification in 1990
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Germany recorded a record budget surplus in the first half of this year, an achievement that immediately triggered calls for tax cuts and higher public investment.
According to figures released by the federal statistical office, Germany had a surplus of €48.1bn in the first six months of 2018, equivalent to 2.9 per cent of economic output — the highest level since German reunification in 1990.
The figure is much higher than the surplus for the whole of last year, which stood at €34bn. That suggests that the number for 2018 could set new records. Berenberg Bank predicted it would be equivalent to 1.7 per cent of gross domestic product, compared with 1.2 per cent last year.
The numbers were released at a time when Germany’s surpluses are under mounting international scrutiny. President Donald Trump has long complained about German cars “flooding the US market” and pointed to the German trade surplus as evidence of how the US is being exploited by its international partners.
In May, French president Emmanuel Macron also urged Berlin to desist from “constantly fetishising budget and trade surpluses”, adding that they “always arise at the expense of others”.
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