German 2011 deficit likely to hit 2.5 percent: Weber

22nd November 2010, Comments 0 comments

The German public deficit should come to around 2.5 percent of output next year after a shortfall of just over 3.5 percent in 2010, German central bank head Axel Weber said Monday.

The government in October said it was confident it would be able to hold the 2011 deficit to less than 3.0 percent, as stipulated by eurozone regulations, after 4.0 percent this year.

Germany's leading economic research groups have forecast a public deficit of 2.7 percent next year.

The government this year is expected to benefit from a stronger than expected economic rebound, which should increase tax revenue and allow for a reduction in social spending, notably for unemployment compensation.

The administration has also launched a far-reaching austerity plan that should produce savings of about 80 billion euros by 2014.

-- Dow Jones Newswires contributed to this report --

© 2010 AFP

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