Germany Counts Surplus Differently, Finds It’s Even Bigger

August 27,2019

Germany’s budget surplus just got bigger — and it’s all down to cellphones.

The country’s statistics office has published the first detailed breakdown of gross domestic product using its latest calculation method. While the revision had insignificant effects on overall growth figures, it did push up the numbers for government income in recent years.

The change was driven by a new way of accounting for mobile phone licensing revenues. While proceeds were previously booked as government income in the year frequencies were auctioned — in 2000 this amounted to 50.8 billion euros ($56 billion) — they’re now recorded proportionally across the duration of the contract, following guidance from Eurostat.

According to this new method, government income from mobile communications leases amounted to 1.1 billion euros in the first half of 2019, Germany’s statistics office said. That helped push the overall budget surplus to 45.3 billion euros in the first half of the year, equating to 2.7% of GDP.

What the revision doesn’t change is the fact that Germany has spent less than it earns from taxes and other sources of revenue for the past five years. Criticism that the country is holding back on public spending and investments has grown heated in recent months amid a sharpening economic slowdown and negative yields on German debt, which effectively pay the government to borrow.

Other adjustments related to the statistics office’s new method included a recalculation of German consumer spending, which resulted in lower nominal GDP for the time period since 1991. The revision also takes greater consideration of the purchase of foreign online services, like streamed video and online games and gambling, into the calculation of imports and private consumption. However, this didn’t affect overall GDP as both components rose by the same amount.