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German tax take surges, ministry optimistic on growth, inflation

German tax take surges, ministry optimistic on growth, inflation 1

BERLIN (Reuters) – Tax take has risen dramatically this year, the German Finance Ministry said in its monthly report on Thursday, adding that there were signs that strong growth would resume next year, when inflationary pressures would also moderate.

Tax income rose 23.1% to 78.2 billion euros in September compared to last year, when the coronavirus pandemic was having a devastating impact on Europe’s largest economy. Over the first nine months of the year, the combined tax take of central and regional government was up 9.1% at 541 billion euros.

While Germany’s recovery from the pandemic has been strong, recent supply chain bottlenecks and resulting inflationary pressures have seen growth forecasts for this year being cut back.

But the ministry said it expected this effect to be temporary.

“Healthy order books give us reason to expect strong recovery impulses from industry and thanks to that strong overall economic growth,” the ministry wrote.

It added that while inflation had picked up pace recently – hitting a 28-year high of 4.1% in September – it expected “significantly more moderate inflation rates” next year.

(Reporting by Christian Kraemer, writing by Thomas Escritt, Editing by William Maclean)

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