In 2009, the Dresden Branch of the ifo institute put up a projection of the public revenues of the Free State of Saxony until 2025. The fast recovery of the economy, however, now requires an adjustment of the results to the current economic development. To be able to analyse the impact of changes in the economic framework in the future, in accordance to the client, regular updates are intended. This shall contribute to designing the Saxonian policy in a sustainable manner and to enhance transparency of policy decisions. In this respect, the projection of the future revenues shall help to identify necessary adjustment measures early, such that options for budget policies in Saxony can be derived in time.
To project the revenues of Saxonian state budget until 2025, they will be decomposed to their different components. These components are now being projected into the future using plausible assumptions and considering legal regulations. The resulting revenues are subject to a sensivity analysis to quantify the meaning of the respective assumptions. This is necessary as events which cannot be anticipated may have a significant influence on the development of the revenues in the projection period of 16 years.
Statistical Office of the Free State of Saxony Federal Statistical Office
Irrespective of the current economic development, the Saxonian state revenues will decline within the projection period. The reason for that can be found in the severely falling population in Saxony as well as the other East German states compared to the German average. This will significantly reduce revenues from the financial equalization scheme between the Laender. Simultaneously, the transfers specially designed to benefit the East German states will gradually decrease until 2019. This drop in revenues will not be compensated by the increasing tax revenues, even in the most optimistic scenarios.
Alexander Eck, Johannes Steinbrecher and Christian Thater: Aktualisierte Einnahmeprojektion für den Freistaat Sachsen – Gute Konjunktur bremst Einnahmerückgang, in: ifo Dresden berichtet 01/2012, p. 29-31 (Download, PDF, 61 KB).
Christian Thater and Johannes Steinbrecher: Aktualisierung der Einnahmeprojektion für den Freistaat Sachsen bis zum Jahr 2025, in: ifo Dresden berichtet 05/2010, p. 31-32. (Download, PDF, 100 KB).
Publication in the series "ifo Dresden Studien" is intended.
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