Helped by strong revenue increases, the general government budget is projected to reach balance this year. In 2008, fiscal policy will turn slightly expansionary due to the corporate tax reform. Further pro-cyclical easing should be avoided. As the supply of skilled labour will become a bottleneck, the government should avoid taking any measures that could impede incentives to take up work.

©OECD Observer No. 264/265, December/January 2008
• OECD Economic Outlook No. 82, December 2007
• Visit www.oecd.org/germany
• All OECD Observer articles on Germany
Follow us