Germany faces over €50 billion tax revenue shortfall

Germany is set to lose €52 billion in federal tax revenue through 2030 compared with earlier forecasts, as policymakers point to the economic fallout from the conflict in Iran and higher global energy costs.

The revised projection, published by the German Finance Ministry, shows federal tax income this year reaching €382.1 billion — €9.9 billion below the October estimate, Caliber.Az reports via foreign media.

Over the next four years, the cumulative shortfall is expected to total €52.3 billion.

“Today’s tax revenue forecast shows just how much the Iran war is hurting us economically,” Finance Minister Lars Klingbeil said in the statement.

“Trump’s reckless war and the resulting global energy price shock are, for the time being, slowing down the positive economic momentum.”

The updated outlook comes as Chancellor Friedrich Merz’s coalition grapples with sluggish growth, fiscal strain and mounting pressure to stabilise public finances while supporting the broader economy.

Officials now expect GDP to expand by just 0.5% in 2026 — half the previously projected rate — before accelerating to 1% in the following year. The weaker trajectory is feeding into widening budget gaps, including an estimated €30 billion shortfall in 2028 that will likely require spending cuts or structural reforms.

By Aghakazim Guliyev