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Germany books record budget surplus in first half
FRANKFURT AM MAIN, Aug 25, 2018 (BSS/AFP) – European powerhouse economy
Germany notched up a record government budget surplus in the first half of
2018 as well as rebounding to stronger growth in the second quarter, official
data showed Friday.
Federal, state and municipal coffers added together were 48.1 billion
euros ($55.7 billion) in the black between January and June, federal
statistics authority Destatis said, up 18.3 billion euros year-on-year.
“Favourable employment and business developments, as well as a moderate
spending policy” contributed to the surplus, which amounted to 2.9 percent of
gross domestic product, Destatis said.
The statisticians cautioned that the figure for the first half-year did
not necessarily point to a similar overshoot over all of 2018.
And swollen government accounts are unlikely to be welcomed beyond
Germany’s borders.
Berlin is regularly criticised by its European and American partners and
by organisations like the International Monetary Fund for failing to invest
enough in areas like infrastructure or the military.
Destatis also confirmed data released earlier this month showing that the
German economy expanded by 0.5 percent quarter-on-quarter between April and
June, adjusting for price, seasonal and calendar effects.
The strong reading largely dispelled fears of a slowdown in the eurozone
engine room after a weaker first three months.
But large neighbours like France and Italy reported much weaker growth.
Most of the drivers for higher second-quarter growth were found at home,
with households and the state increasing consumption spending and higher
investment in equipment and construction.
Meanwhile, growth in exports was outpaced by growth in imports.
“Defying the often-heard international criticism, the economy is already
showing a very balanced growth model,” economist Carsten Brzeski of ING Diba
bank commented.
Meanwhile, tensions between the European Union’s and US President Donald
Trump over his “America First” trade policy “were a threat but did not leave
any significant marks on the economy,” he added.
“Obviously, this could change in the coming months” if a fragile trade
truce struck with Washington fails to hold, Brzeski warned.
BSS/AFP/HR/1002