Wednesday, January 06, 2021
Deficit of 157 billion euros
The crisis tears a deep hole in the treasury
The corona-induced recession is having a massive impact on the German national budget. While tax revenues declined in the past year, spending on state aid increased. This translates into a significant funding deficit.
The effects of the corona pandemic left the German state with a deficit of 157.1 billion euros in the first three quarters of the previous year. This was announced by the Federal Statistical Office in Wiesbaden, with reference to the preliminary results of the cash statistics. Expenses rose by 11.6 percent, while income fell by 4.3 percent between January and September.
The expenditures of all public budgets in the study period increased to around 1.23 trillion euros in the corona crisis. At the same time, revenues fell to around 1.07 trillion, which led to a so-called financing deficit of 157.1 billion euros. In the three quarters of 2019, the federal, state, local and social security funds achieved an increase of 18.8 billion euros. A minus at this point in time was last seen in 2016, which, however, was very small at 0.1 billion euros.
According to the Federal Office, the higher expenditure was mainly explained by higher so-called allocations and grants as a result of the pandemic, for example to companies or hospitals. This was offset by falling income from taxes and similar charges, as the German economy went through a severe recession in the first half of the year due to the corona restrictions. All government budget levels were therefore affected.
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