Following the expiry of the COVID-19 measures, expenditures of Europe's largest economy decreased slightly in the first six months, while its revenues increased by 11.9 percent year-on-year, according to Destatis.
The increase in sales taxes was "particularly large," as a reduced value-added tax (VAT) rate was still in force in the same period of 2021 due to the pandemic.
During the pandemic, the German government provided 130 billion euros in economic aid alone, including loans to rescue major companies, such as the flag carrier Lufthansa. Billions were spent to support consumers.
In 2020, Germany recorded its first budget deficit since 2013 at nearly 190 billion euros, also the highest since German reunification, according to Destatis.
In addition to the return to normal VAT levels, the increase in Germany's tax revenues in the first half of the year was also attributable to "exceptionally high price inflation," Destatis noted.
Driven by soaring energy prices, inflation in Germany has risen steadily since the start of the Russia-Ukraine conflict. The inflation rate peaked at 10 percent in September.
The German government plans to prevent high inflation from leading to increased tax expenditures for consumers.
To cushion the impact of high inflation, Germany has already presented relief packages for the economy and consumers totaling 95 billion euros. In addition, it announced a "protective umbrella" of up to 200 billion euros to stabilize the economy.
Despite the inflation relief expenditures, Germany is aiming to return to a balanced budget in 2023, and therefore will apply the so-called debt brake, which prevents new borrowing for the first time since 2020. (1 euro = 0.97 U.S. dollar)
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