Germany achieves near record budget surplus of €18.3bn

Germany achieved a near record budget surplus of €18.3bn (£16.8bn) in the first half of 2017, according to government figures released on Friday, and the timing of the figures could not be better for Angela Merkel, who is seeking a fourth term as chancellor in elections next month.

The surplus is the second largest Germany has recorded since reunification in 1990.

The country recorded an even bigger surplus of  €28.8bn in the second half of 2000, but that was boosted by a government windall from the sale of mobile phone licenses.

By contrast, the surplus for the first half of 2017 was fuelled by higher tax revenues than expected, as the German economy continues perform strongly.

Unemployment fell to just 3.8 per cent in June, when measured by the International Labour Organisation standards used in the UK.

High government spending on housing and integration for the more than 1m asylum-seekers who have arrived in Germany sincd 2015 is also believed to have driven the strong figures.