World Economy

Germany Posts Record Budget Surplus

Germany Posts Record Budget SurplusGermany Posts Record Budget Surplus

The German government, regional states and communities have logged yet another annual budget surplus, the statistics office has reported. Increased revenues were based on a continuously robust labor market.

Germany posted a record annual surplus of €23.7 billion ($25 billion) for 2016, the National Statistics Office (Destatis) reported on Thursday, DW said.

The federal government alone accounted for €7.7 billion of the surplus, with the 16 states and communities across Europe’s powerhouse contributing the bulk of the extra resources.

Destatis noted the 2016 surplus was highest since the country reunited in 1990 and marked the third annual surplus in a row.

Germany thus has had no problems whatsoever to adhere to the EU’s financial rules, which among other things require member states to keep fresh borrowing below 3% of gross domestic product.

Germany’s renewed surplus is a direct result of a healthy economy with record-low unemployment, washing additional billions in income and sales tax revenues into state coffers.

According to the country’s central bank, the Bundesbank, the economy looks set to expand further in the first quarter of 2017, thriving on strong domestic consumption and a building boom linked not least to a special program to accommodate a large number of migrants.

The 2016 surplus figures are good news for Finance Minister Wolfgang Schauble, who has insisted on a balanced budget for years. Critics argue that far too little is being invested to modernize the country’s infrastructure.

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