October 30, 2019 / 2:24 PM / a month ago

German sees higher tax revenues this year despite slowing economy

German Finance Minister Olaf Scholz holds a news conference on tax revenues in Berlin, Germany, October 30, 2019. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - The German government expects tax revenue this year to come in 4 billion euros higher than previously projected, the finance ministry said on Wednesday, indicating that an economic downturn in Europe’s largest economy is not yet hurting state finances.

For 2020, the federal government can expect 0.2 billion euros less than estimated in May, the ministry said. Looking at all state levels, tax revenue from 2019 through 2023 is seen 7.1 billion euros lower than previously forecast.

The tax revenue estimates are likely to increase pressure on Berlin to do more to counter the economic slowdown which is driven by a recession in the export-dependent manufacturing sector caused by trade disputes and a slowing world economy.

Earlier on Wednesday, incoming European Central Bank President Christine Lagarde said euro zone countries with large budget surpluses such as Germany should invest more to boost economic growth.

Reporting by Michael Nienaber, editing by Thomas Escritt

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