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BUDGET

Mega budget surplus is Germany’s best since 1990

Germany ran up a record surplus in its public finances in 2015, with Europe's biggest economy showing "solid and consistent" growth last year, the federal statistics office said on Tuesday.

Mega budget surplus is Germany's best since 1990
Photo: DPA

Germany notched up an overall surplus of €19.4 billion on its public budgets last year, “which in absolute terms is the highest since unification” in 1990, the office said in a statement.

Measured against gross domestic product (GDP), the surplus amounted to 0.6 percent of overall output, the statisticians calculated.

In 2014, Germany had achieved a surplus of €8.9 billion or 0.3 percent of GDP.

Under eurozone rules, member states are not allowed to run up deficits in excess of 3.0 percent of GDP and are obliged to bring them into balance or surplus in the medium term.

Last year was the second year in a row that Germany's public finances have been firmly in the black.

At the same time, the statistics office confirmed a preliminary estimate that the economy expanded by 0.3 percent in the fourth quarter of last year, the same rate of growth as in the third quarter.

“The economic situation in Germany in 2015 was characterised by solid and consistent growth,” the office said.

Across the whole year, GDP grew by 1.7 percent.

“Positive impulses came primarily from domestic demand,” Destatis said.

Public spending increased by 1.0 percent in the fourth quarter and household spending edged up by 0.2 percent.

In addition, investment increased with construction investment expanding by 2.2 percent over the three-month period and investment in equipment rising by 1.0 percent, driven primarily by public investment.

By contrast, foreign trade had a dampening effect on fourth-quarter growth with exports falling by 1.7 percent and imports slipping by 0.6 percent, Destatis calculated.

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MONEY

Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.

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