Bavaria's financial forecast: Tax plus raises hopes and warnings!

Bavaria's financial forecast: Tax plus raises hopes and warnings!

Bavaria's Finance Minister Albert Füracker (CSU) has announced a positive tax forecast for 2026. According to current estimates, a tax increase of around 1.5 billion euros is expected compared to the May 2025 estimate. An additional plus of 1.8 billion euros is also forecast for 2027. These developments give cause for hope for Bavarian municipalities, which can also expect increasing income. For 2025 it is 800 million euros, for 2026 900 million euros and for 2027 1.1 billion euros, like stern.de reported.

Despite these positive prospects, Füracker urges caution. He warns against exaggerated expectations and highlights the high uncertainty of the forecasts. Economic growth of 1.3 percent is predicted for 2026, but this still has to prove itself. This is an important factor, he reminds, because the recovery of the economic situation is crucial for the stability of tax revenues.

The budget situation remains tense

In view of the tense budget situation, Füracker is calling for strict spending discipline and consolidation for the 2026/27 double budget. New debts could become an issue again due to the financial situation, and Prime Minister Markus Söder (CSU) is not ruling out new debts. The deficits of Bavarian municipalities were already alarming, with a deficit of 5.3 billion euros in 2024 and around 4.6 billion euros in the first half of 2025.

Bavaria's liabilities amounted to around 36 billion euros at the end of the year, of which 19.5 billion euros came from old debts, 9.8 billion euros from pandemic special funds and around 7 billion euros from the rescue of BayernLB. However, compared to other federal states, such as North Rhine-Westphalia with over 174 billion euros in debt, Bavaria is in a good financial position, which puts the situation somewhat into perspective.

Macroeconomic perspectives

Although the current forecast shows a slightly better result compared to the more pessimistic May estimate, the situation of public budgets in Germany remains serious. The October tax estimate reports a small increase in tax revenue, but real economic output in Germany is still at the level of 2019. A sustainable economic recovery is essential to secure high tax revenue in the long term.

Füracker emphasizes the need to continue making strategic investments in the future in the coming years. The budget for 2026/2027 is planned under strict financial conditions in order to set the course for positive economic development. Measures for tax relief and further investments are crucial to bring about a turnaround in the economy, added bayern.de.