March 22, 2018 / 10:53 AM / 4 months ago

Germany cuts debt issue plans due to buoyant tax revenues

BERLIN (Reuters) - Germany’s debt agency on Thursday cut its debt issue plans for the second quarter by two billion euros after the finance ministry reported a surge in tax revenue.

“Funding requirements of the Federal Budget and its special funds have decreased since the beginning of the year,” the finance agency said.

The government intends to issue two billion euro less in capital market instruments in the second quarter than announced in December, it added.

“This will lead to a reduction of the annual issuance volume of nominal capital market instruments from 183 billion euros to 181 billion euros,” the debt agency said.

Germany’s booming economy is pushing up tax revenues as more workers join the country’s solid labor market and company profits rise. The country also benefiting from low borrowing costs, partly enabled by the European Central Bank’s loose monetary policy.

The German government has boasted a budget surplus since 2014 and Finance Minister Olaf Scholz told lawmakers on Thursday that he would pile no new debt over the next four years.

Reporting by Michael Nienaber,; Editing by Joseph Nasr

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