By Maria Martinez
BERLIN (Reuters) -Germany expects to bring in 33.6 billion euros ($39.18 billion) more in tax revenues in the 2025-2029 period than previously forecast, although its finances still face a budget hole of around 30 billion euros in 2027.
"The more positive economic outlook is reflected in rising tax revenues," German finance minister Lars Klingbeil said in a statement on Thursday after the country's tax council revised its projections for total tax revenues higher by 0.7% to 5.17 trillion
euros for 2025-2029.
In May, its estimates were cut by 81.2 billion euros due to an economic downturn and tax relief measures.
Chancellor Friedrich Merz's government backed a 500 billion euro ($582 billion) spending plan in March to drive growth in Germany's economy, which was hit by the pandemic and Russia's 2022 invasion of Ukraine.
Europe's largest economy contracted for a second consecutive year in 2024, becoming the only G7 member that failed to grow for the last two years.
However, the government, which expects only a 0.2% growth this year, has predicted the economy will rebound with growth of 1.3% next year and 1.4% in 2027, supported by state spending.
"The German government is bearing by far the bulk of the costs of the growth booster with which we are stimulating the economy," Klingbeil said. "That is why the government benefits little from additional tax revenues."
He also noted that pressure for budget cuts remains high.
($1 = 0.8575 euros)
(Reporting by Maria Martinez, editing by Kirsti Knolle and Muvija M)
