FILE PHOTO: German Vice Chancellor and Finance Minister Lars Klingbeil speaks during a plenum session of the lower house of parliament, the Bundestag, to vote on the Federal Government's draft legislation for the 2025 federal budget, in Berlin, Germany, September 18, 2025. REUTERS/Annegret Hilse/File Photo

By Maria Martinez

BERLIN (Reuters) -Germany's federal and state government tax revenues were up 2.6% in September from the same month a year ago, the finance ministry said in a report on Tuesday, adding that tax revenues will not get a boost from economic momentum in the short term.

Germany, Europe's largest economy, contracted in 2024 for the second consecutive year, and the government expects only 0.2% growth this year.

The report said leading indicators did not point to "a noticeable acceleration in economic momentum in the short term".

German exports unexpectedly fell in August on a sharp decline in U.S. demand, industrial output posted its biggest decline in more than three years, and German industrial orders fell for a fourth straight month in August.

Total tax revenues hit 88.4 billion euros ($103.09 billion) in September.

Wage tax recorded a noticeable increase in revenue, while revenues from value-added taxes stagnated, the report said.

From January to September, tax revenues increased by 6.2% compared with the same period in 2024 to 665 billion euros.

For 2025 as a whole, tax analysts predict revenues will climb to 893.3 billion euros, up 3.7%, the report said.

($1 = 0.8575 euros)

(Reporting by Maria Martinez, Editing by Miranda Murray)