Germany will record a budget deficit of over 140 billion euros by 2029, requiring spending cuts, despite optimistic forecasts regarding tax revenues.

Germany is preparing to face a budget deficit of over 140 billion euros by 2029, said Finance Minister Lars Klingbeil.

Although forecasts for tax revenues have been revised positively, ministries will need to cut spending.

The government of Chancellor Friedrich Merz has announced a spending plan of 500 billion euros to stimulate the economy affected by the pandemic and Russia's invasion of Ukraine, but the source of funding remains uncertain. Recent estimates suggest that tax revenues will be 33.6 billion euros higher than previously anticipated, which will reduce the budget deficit in 2027 by 7-8 billion euros.

However, budgets for 2028 and 2029 are projected to record deficits of over 60 billion euros.

Klingbeil emphasized the need for strict consolidation, requiring all ministries to cut spending.

At the end of the year, leaders of the governing coalition will present a plan to cover the financial gap. Although Germany has experienced an economic recession, a modest recovery of the economy is expected in the coming years.